Trump Administration Student Loan Debt Collection Has One 15 Percent Cap and Two Floors

On October 19, 2026, news reports said the Education Department and the Treasury were preparing to restart involuntary collections on defaulted federal student loans as soon as November, with private collection agencies doing part of the work, with no confirmation from either department. If collections resume, a borrower in default can lose part of each paycheck to administrative wage garnishment and part of each Social Security payment to a Treasury offset, and both tools are usually summed up with the same number, 15 percent. The 15 percent is a ceiling in both, but each tool has its own floor underneath it, $750 a month for Social Security and 30 times the federal minimum wage, or $217.50 a week, for pay, and for lower incomes the floor sets the amount.

The deadlines also differ. A wage garnishment notice gives 30 days to ask for a hearing that holds the order back; a notice of tax refund offset gives 65 days to ask for a review. A borrower who receives both in the same week and plans around the longer date can lose the shorter one. The figures below come from the statute and regulations, not from the reports.

What Changed on October 19 and What Was Already Paused

The Department itself had switched collections off. In a U.S. Department of Education press release on delaying involuntary collections, a page last reviewed on January 16, 2026, the Department said it was temporarily delaying involuntary collections, naming Administrative Wage Garnishment (AWG) and the Treasury Offset Program (TOP), while it put in place repayment changes under the Working Families Tax Cuts Act. The release also pointed defaulted borrowers to a second chance at loan rehabilitation and a new income-driven plan beginning July 1, 2026.

The October 19 reports describe the end of that pause, not new rules. When orders and offsets resume, the amounts and deadlines come from the provisions below, which the eCFR showed as up to date on October 19, 2026. Borrowers weighing a way out of default can compare plan payments in RAP Undercuts the IBR Monthly Payment in Three Income Bands, Not in Four.

Wage Garnishment: 15 Percent From the Statute, a Floor From the Regulation

The authority to garnish pay without a court order on a federal student loan is 20 U.S.C. 1095a, the Higher Education Act wage garnishment requirement (govinfo, 2023 edition). Its subsection (a) allows garnishment from a borrower not currently repaying under a repayment agreement, “provided that” eight numbered conditions hold. The first sets the ceiling: “the amount deducted for any pay period may not exceed 15 percent of disposable pay, except that a greater percentage may be deducted with the written consent of the individual involved”.

The other seven are procedures and protections. Paragraph (2) requires mailed notice “a minimum of 30 days prior to the initiation of proceedings”. Paragraph (3) allows inspecting the records; (4) offers a written repayment agreement; (5) provides a hearing on the debt and, absent an agreement, on the schedule; (6) makes an employer that fails to withhold liable for the amount; (7) shields a worker involuntarily separated and rehired within 12 months until 12 months of continuous reemployment; and (8) bars firing or disciplining someone because of the garnishment.

The Department's own procedure adds a second line. 34 CFR 34.19, Amounts to be withheld under a garnishment order (eCFR), reads: “The employer must comply with our garnishment order by withholding the lesser of— (1) The amount directed in the garnishment order; or— (2) The amount specified in 15 U.S.C. 1673(a)(2) (Restriction on Garnishment); that is, the amount by which a debtor's disposable pay exceeds an amount equal to 30 times the minimum wage.”

The minimum wage in that formula is the federal rate in 29 U.S.C. 206(a)(1), the Fair Labor Standards Act minimum wage (govinfo): “$7.25 an hour, beginning 24 months after that 60th day”, counted from May 25, 2007, so since July 24, 2009. Thirty times $7.25 is $217.50, a weekly figure. Section 34.19 cites 29 CFR 870.10, the Labor Department rule on garnishment limits (eCFR), which converts the 30-times figure for longer pay periods by the number of workweeks, counting a calendar month as 4⅓ workweeks. So the protected amount depends on pay frequency: $217.50 weekly, $435 biweekly (60 times $7.25), $471.25 semimonthly (65 times) and $942.50 monthly (130 times).

The base for both lines is disposable pay. 34 CFR part 34, Administrative Wage Garnishment (eCFR), defines it in section 34.3 as “that part of a debtor's compensation for personal services, whether or not denominated as wages, from an employer that remains after the deduction of health insurance premiums and any amounts required by law to be withheld.” Taxes come out first; court-ordered withholding does not, and bonuses, commissions and vacation pay count.

Run weekly disposable pay through both lines. At $600, 15 percent is $90 and the excess over $217.50 is $382.50, so the order takes $90. At $250, 15 percent would be $37.50, but the excess is only $32.50, so the employer withholds $32.50. At $200, nothing is withheld. The two lines meet at $255.88 a week, where both come to $38.38; below that point the floor sets the amount, above it the 15 percent does. On a biweekly paycheck the meeting point is $511.76, on a semimonthly one $554.41 and on a monthly one $1,108.82.

Several Orders on One Paycheck

Stacking falls under 34 CFR 34.20, Amount to be withheld under multiple garnishment orders (eCFR), with a different percentage. If another creditor's garnishment was served first, or a family support order is served at any time, the Department's order gets the smaller of the 34.19(b) amount and “An amount equal to 25 percent of the debtor's disposable pay less the amount or amounts withheld under the garnishment order or orders with priority over our order.”

Take weekly disposable pay of $800, a prior non-Department garnishment of $100, and a Department order for 15 percent, or $120. Under 34.19(b), the employer compares $120 with $582.50, which is $800 minus $217.50, and gets $120. Under 34 CFR 34.20(b)(2), 25 percent of $800 is $200, and subtracting the $100 already taken leaves $100. The Department receives $100. Here 25 percent is a shared ceiling for all orders together, a different job from the court-garnishment limit in Reading a Garnishment Order Means Running Two Caps and Taking the Smaller One.

A borrower with several Department debts meets yet another cap. Under 34 CFR 34.20(c)(2), the total for Department orders “does not exceed the amounts specified in the orders, the amount specified in § 34.19(b)(2), or 15 percent of the debtor's disposable pay, whichever is smallest.” Two student loan orders cannot add up to 30 percent. Paragraph (d) runs in the other direction: an employer may withhold more “if the debtor gives the employer written consent.”

Social Security: Same 15 Percent, a $750 Floor

Benefit offsets run through Treasury, under 31 CFR 285.4, Offset of Federal benefit payments (eCFR). Paragraph (e)(1) has three branches, and the smallest one controls: “The amount offset from a monthly covered benefit payment shall be the lesser of: (i) The amount of the debt, including any interest, penalties and administrative costs; (ii) An amount equal to 15% of the monthly covered benefit payment; or (iii) The amount, if any, by which the monthly covered benefit payment exceeds $750.” The first branch controls only when the remaining balance is the smallest.

The examples in paragraph (e)(3) show the floor at work. For an $850 benefit: “The amount offset is the lesser of $127.50 (15% of $850) or $100 (the amount by which $850 exceeds $750).” For $1,250 the offset is $187.50, because 15 percent is smaller than the $500 excess, leaving $1,062.50. For $650: “No amount will be offset because $650 is less than $750.”

Solve for the meeting point and it is $882.35 a month, where 15 percent and the excess over $750 both come to $132.35. Below that benefit the floor decides, and the beneficiary keeps exactly $750; above it, the beneficiary keeps 85 percent. An $800 benefit loses $50, not the $120 that 15 percent suggests. A $2,000 benefit loses $300 and keeps $1,700.

Put the two tools side by side at $1,000 a month. Paid as monthly wages, $1,000 of disposable pay loses $57.50, because the monthly wage floor is $942.50. Received as a Social Security benefit, $1,000 loses $150, because the floor is $750. Same income, same 15 percent ceiling, and a gap of $92.50 a month.

Three more parts of 31 CFR 285.4 matter. The definition of a covered benefit payment in paragraph (b) covers payments under the Social Security Act “(other than SSI payments)”, leaving out Supplemental Security Income. Under 31 CFR 285.4(f), the payee is told in writing before the first offset when it will start and which agency asked for it, and gets another notice after an offset, though failing to receive those notices does not undo the offset. And under 31 CFR 285.4(e)(2), “A debtor shall not receive a refund of any amounts offset if the debtor's monthly covered benefit payments are reduced, suspended, terminated, or otherwise not received for a period of 12 months.”

Two Notices, Two Clocks

The wage garnishment clock is in part 34. Section 34.4(c) reads: “At least 30 days before we start garnishment proceedings, we mail the notice by first class mail to your last known address.” Section 34.11 counts from the date on the notice, not the date it arrives: a mailed request is timely if postmarked by that 30th day, and otherwise if “The designated office receives the request not later than the 30th day following the date of the garnishment notice.”

A timely request buys time. Under 34 CFR 34.11, Timely request for a hearing (eCFR), the Department “will not issue a garnishment order before we— (1) Provide the requested hearing; and (2) Issue a written decision on the objections you raised.” A late request still gets a hearing, but the order is not delayed unless the lateness was beyond the borrower's control or the Department has another good reason. If a hearing on a late request is not finished within 60 days, paragraph (d) suspends the order until a decision issues.

The tax refund offset clock is longer and branches. Under 34 CFR 30.33, procedures for IRS tax refund offsets (eCFR), the Department refers a debt to Treasury after the procedures in sections 30.20 through 30.28, as modified there. The notice says the debt is past due, that referral is intended, and that the borrower may inspect records, obtain a review, or sign a repayment agreement by a stated date. Under 34 CFR 30.33(c)(1), a records request has to be filed within 20 days after the notice date.

A review request is due by the later of three dates in 34 CFR 30.33(d): 65 days after the notice; 15 days after the Department makes requested records available, if they were asked for in time; or seven days after a guaranty agency's initial determination, where one did an initial review. Paragraph (f) uses the same three-way logic, worded “by the latest of”, for signing a repayment agreement and making the first payment: the seventh day after the Department's review decision; the sixty-fifth day after the notice, if neither a review nor a records request was made; or the fifteenth day after records are made available, if they were requested in time.

The overlap is the trap. With a garnishment notice and a refund offset notice dated the same day, a borrower has 30 days to hold the wage order and 65 days to request a refund review. Working to the later date gives up the earlier protection: after day 30, an order can issue while a late hearing request is pending.

Numbers to Re-check

• $7.25. The federal minimum wage in 29 U.S.C. 206(a)(1), in effect since July 24, 2009, in the 2023 edition read here. Every wage floor above is a multiple of it: $217.50, $435, $471.25 and $942.50. A new federal rate moves each of them.
• 15 percent. The ceiling for one order in 20 U.S.C. 1095a(a)(1), and for all Department orders together in 34 CFR 34.20(c)(2). The 25 percent figure in 34 CFR 34.20(b)(2) applies only when another creditor's order was served first or a family support order is served at any time.
• $750. The Social Security floor, written as a flat dollar amount in 31 CFR 285.4(e)(1), with no adjustment formula in that paragraph.
• $255.88, $511.76, $554.41, $1,108.82 and $882.35. Meeting points computed here from the rules; no rule prints them. Above each, the 15 percent decides; below it, the floor does.
• 30, 20 and 65 days. Counted from the date on the notice. The 65-day review date is the earliest of the possible review deadlines, because 34 CFR 30.33(d) takes the later of its three dates.
• 12 months. Twice: the reemployment protection in 20 U.S.C. 1095a, and the stretch of reduced, suspended, terminated or missing benefit payments that brings no refund of amounts offset under 31 CFR 285.4(e)(2).
• November. The restart month in the October 19 reports, which cited no confirmation from either department.

Where This Doesn't Apply

Tax refunds. The $750 floor is written for monthly benefit payments, and the 15 percent and minimum-wage lines are written for pay. Refund offset amounts fall under a separate Treasury regulation not reviewed here, so neither cushion should be assumed to protect a refund.

Benefit offset deadlines. The 20-day and 65-day dates come from 34 CFR 30.33, which is written for IRS tax refund offsets. The general procedures in sections 30.20 through 30.28 were not reviewed, so the 65-day date should not be assumed for a Social Security offset notice.

Supplemental Security Income. SSI is left out of the covered benefit payments in 31 CFR 285.4(b), so the offset formula above does not reach it.

Federal employees. Pay from a federal agency is collected through salary offset under 34 CFR part 31, not through part 34, so the 30-day hearing rule and the 34.19 formula do not govern it.

Recently rehired workers. A borrower who was involuntarily separated and reemployed within 12 months is protected from deductions until 12 months of continuous reemployment, under paragraph (7) of 20 U.S.C. 1095a(a).

Written consent. Both the statute and 34 CFR 34.20 allow more than the ceilings above if the borrower agrees in writing.

Loans held by guaranty agencies, or a Treasury-run garnishment. 20 U.S.C. 1095a also lets a guaranty agency garnish pay on loans it holds, under procedures not reviewed here. If Treasury or its contractors garnish on the Department's behalf under the reported arrangement, Treasury's own regulations could apply instead of part 34; those were not checked.