According to a press release from the Committee for a Responsible Federal Budget, President Trump reversed his decision to allow wage-garnering to collect outstanding federal student loan debt. Although Trump restarted the Treasury Offset Program in May 2025; last Friday, he revived and extended a pandemic-era, indefinite pause of the collection of defaulted federal student loan debt.
President of the Committee for a Responsible Federal Budget Maya MacGuineas commented on the reversal: “Congress enacted historic cost-saving reforms to the federal student loan program this year that put the program on a sustainable path and fair repayment system, and the Trump Administration has been implementing that plan with fiscal costs in mind. Preventing the actual collection of the debt puts that all at risk. Not only will it increase costs to the taxpayer, but it will also actually worsen affordability challenges by allowing student loan burdens to balloon and putting upward pressure on interest rates and inflation.”
However, the press release does not tell the full story. Rather than a reversal, the decision to pause the Treasury Offset Program and wage garnishing is a temporary delay to enable the Department of Education “to implement major student loan repayment reforms under the Working Families Tax Cuts Act (the Act) to give borrowers more options to repay their loans.”
Under Secretary of Education Nicholas Kent clarified that Trump’s position on student debt has not changed, but rather the temporary delay will make repayment easier and more efficient. “After the Biden Administration misled borrowers into believing their student loans would not need to be repaid, the Trump Administration is committed to helping student and parent borrowers resume regular, on-time repayment, with more clear and affordable options, which will support a stronger financial future for borrowers and enhance the long-term health of the federal student loan portfolio,” stated Kent.
On July 1, 2026, borrowers in default can choose between a single standard repayment plan or income-driven repayment (IDR) plan. In the meantime, “the delay in collections will give defaulted borrowers additional time to evaluate these new repayment options once they consolidate their loans or complete a repayment or rehabilitation agreement.”
Fact: Trump did not change his position on student loan debt. Borrowers will still be required to pay back their loans.
