Advocates Demand Immediate Halt to Forced Collections; New State-by-State Data Show Defaults Surge Across the Country

January 7, 2026 | WASHINGTON, D.C. — Protect Borrowers released a new analysis today estimating that, since January 2025, a borrower has defaulted on a student loan every nine seconds—a wave of more than 3.6 million new student loan defaults since President Trump returned to office. This startling estimate marks an unprecedented default crisis nearly three times worse than the year prior to the COVID-19 pandemic, when 1.22 million borrowers defaulted on a student loan—then equivalent to a new default every 26 seconds.

In response to the Trump-era surge in new student loan defaults, a coalition of labor unions, civil rights groups, and borrower advocates sent a letter to Education Secretary Linda McMahon urging the Trump Administration to halt plans to resume garnishing borrowers’ wages to repay defaulted student loans. These plans were announced just as President Trump announced a new commitment to lower costs for working class Americans.

From the letter:

“The decision to resume wage garnishment of millions of borrowers amidst a growing affordability crisis crushing working families is calloused and unnecessary. The decision also comes at a time when struggling borrowers have been forced to wait amidst a nearly 1 million application backlog to enroll in an Income-Driven Repayment (IDR) plan and as mass layoffs at the Department have made it even harder for borrowers to get help with their student loans or if they are experiencing issues with their student loan servicer.”  

“History has shown that the Department’s inability to control its debt collection machine—particularly the AWG system—leaves borrowers and their families at risk. The Department has the power to ensure that borrowers are no longer left at the mercy of a system it cannot control. We urge the Department to immediately halt its plan to resume garnishment of millions of struggling borrowers’ wages.”

Also see below for quotes from signing organizations.

Protect Borrowers’ analysis of new government data shows that by the end of 2025, student loan borrowers had defaulted on debts totaling more than $92 billion—bringing the total number of borrowers whose debts meet the legal definition of a student loan default to nearly 9 million people nationwide. Nearly two-thirds of the borrowers who defaulted during the Trump Administration—more than 2.6 million people—live in states that President Trump won in the 2024 election. In addition to this new analysis, Protect Borrowers also released a new state-by-state estimate of the distribution of new defaults since President Trump’s inauguration.

The analysis comes as millions of borrowers have fallen off an unprecedented default cliff and while the Trump Administration prepares to resume its Administrative Wage Garnishment (AWG) system—which would forcibly seize money from the paychecks of working families for the first time in more than five years. In late December, The Washington Post reported on the Trump Administration’s plans to resume AWG beginning the week of January 7, 2026. In response, a coalition of advocates sent a rapid response letter today to Secretary McMahon urging the Trump Administration to halt its plans to resume the AWG system. A copy of the letter can be found here.

Protect Borrowers Deputy Executive Director Persis Yu said: “While families continue to struggle with stagnant wages and an affordability crisis, this Administration’s decision to garnish precious wages from defaulted student loan borrowers is an unnecessary policy choice that will push struggling working families even further into the red. History has shown us that the Department of Education is unable to control its severely broken wage garnishment system, so to resume this fundamentally flawed system as families continue to struggle is simply cruel and irresponsible.”

AFT President Randi Weingarten said: “Federal policy should promote college as a viable option for all Americans seeking a better life, not just those who are wealthy. That was the point of the federal student loan program that more than 42 million Americans use. 

“Education Secretary Linda McMahon clearly doesn’t agree. Student borrowers have been met with hostility from this Department of Education—from its huge backlogs of applications for loan forgiveness and repayment plans, to sending borrowers to credit agencies, thereby ruining their credit, to now restarting aggressive student loan garnishment. This is not about borrowers’ responsibility; it’s outright hostility to the young people trying to get ahead. The Trump Administration is choosing to squeeze teachers, nurses and others while prices are increasing and families are struggling to stay afloat, ripping away wages and tax refunds when people need them most.”

NAACP President and CEO Derrick Johnson said: “By garnishing wages for defaulted student loan borrowers, the Trump Administration will only deepen financial hardship for working families and disproportionately harm Black borrowers. Millions are already struggling with rising costs and economic uncertainty, and stripping wages will only push families further into financial crisis. Instead of punishing Americans for seeking education and their own advancement, the Department of Education must pursue options that expand access to affordable repayment options, protect vulnerable borrowers, and ensure an equitable path forward.”

NEA President Becky Pringle said: “Resuming wage garnishments during a mounting affordability crisis is a cruel blow to borrowers who are already struggling to make ends meet. This Administration is choosing to strip away the economic security of working families instead of providing needed relief.”

Further Reading

Debt Collection Lab and Protect Borrowers blog on default: Falling Off the Student Loan Default Cliff

Protect Borrowers statement on Trump Admin announcement to begin mandatory collections for borrowers in default: Advocates Slam Trump Administration for Throwing Millions of Americans With Student Debt Into the Jaws of Government Collections Machine

Protect Borrowers blog explaining how millions of borrowers are heading towards a default cliff: Millions of Student Loan Borrowers Are Headed Towards A Default Cliff

Protect Borrowers statement on ED’s plans to start garnishing wages from borrowers in default: Trump Admin Decision to Garnish Wages from Defaulted Student Loan Borrowers is Cruel, Unnecessary, and Irresponsible

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About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.