Sponsors (2)
The bill delivers quick financial relief and stronger legal protections for borrowers harmed by improper wage garnishment, but does so at the cost of increased fiscal exposure and administrative and legal burdens that could raise taxpayer costs and complicate employer compliance.
Students and low-income borrowers who had wages improperly garnished will get prompt financial relief: the Secretary must refund twice the improperly garnished amount within 10 days and wage garnishment is suspended for at least one year unless safeguards are certified, reducing immediate income loss.
Workers harmed by continued garnishment can sue employers directly — the bill creates a private right of action allowing recovery of withheld wages, fees, and potentially punitive damages, strengthening remedies for affected employees.
Quarterly employer verification and centralized reporting will increase transparency and oversight of garnishment practices, helping states and the Department of Education detect and stop improper garnishments faster.
The Department of Education and taxpayers face immediate fiscal exposure and cash-flow pressure because the Secretary must pay double improperly garnished wages within 10 days, which could strain budgets and require rapid outlays.
Pausing administrative wage garnishment and banning garnishment for loans outstanding over 10 years can reduce federal debt collection efficiency and shift or increase long-term losses, raising costs for taxpayers or guaranty agencies.
Employers, particularly small businesses, will face added administrative burden and legal risk from quarterly verification, centralized reporting, and potential liability if garnishment continues in error, increasing compliance costs and exposure to lawsuits.
Based on analysis of 2 sections of legislative text.
Immediately suspends administrative wage garnishment for federal student loans until the Secretary certifies safeguards, adds borrower remedies, and bars garnishment after 10 years.
Official title: Suspend and reform the authority under the Higher Education Act of 1965 for the Secretary of Education to carry out an administrative wage garnishment program.
Introduced May 14, 2025 by Cory Anthony Booker · Last progress May 14, 2025
Suspends the Department of Education's authority to use Administrative Wage Garnishment (AWG) to collect federal student loan debt from the day the law takes effect until the Secretary certifies certain safeguards and capabilities are in place (certification cannot occur earlier than one year after enactment). It requires a centralized garnishment database and reporting if AWG resumes, creates strong borrower and employer remedies for unlawful garnishments (including repayment by the Department within 10 days and recovery of damages and fees), and prohibits garnishment for loans outstanding more than 10 years.