Ending Administrative Garnishment Act of 2025
- Bill Number
- S. 1764
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Education
- Status
- Introduced
- Latest Action
- 2025-05-14: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2025-12-05T22:50:16Z
AI-Generated Summary
Purpose
The Ending Administrative Garnishment Act of 2025 aims to temporarily halt and reform the U.S. Department of Education's ability to garnish (withhold) a portion of a person's wages to repay defaulted federal student loans. It seeks to protect borrowers from improper or overly aggressive collections by introducing safeguards, accountability measures, and limits on the program's use.
Key Provisions
- Suspension of Garnishment Authority: The Department of Education's power to garnish disposable pay (the portion of wages left after required deductions like taxes) is paused starting from the bill's enactment date. This pause lasts until the Secretary of Education submits a certification to Congress at least one year later.
- Certification Requirements: The Secretary must certify one of two options:
- That the Department has implemented reforms, including:
- A process to refund improperly garnished wages within one week of identifying the error.
- The ability for the Secretary to independently stop or suspend garnishments at any time, for individual borrowers or groups.
- Quarterly checks with employers to verify accurate garnishment details, such as scheduled amounts and contact information for employees and employers.
- Or, that the reforms cannot be implemented, leading to a permanent end to wage garnishment for student loans.
- Data Collection and Reporting: If reforms are certified, the Department must create a centralized database tracking demographic and employment details of affected borrowers (both before and after enactment). The Secretary must submit an initial report on this data within 90 days and annual reports thereafter, summarizing the information and evaluating the program's use.
- Employer Liability: Employers can be sued in state or federal court by the Department, a loan guaranty agency (an organization that helps manage federal student loans), or the affected individual for improperly withholding wages after receiving a notice to stop. Successful suits can recover the withheld amount, actual damages, attorney fees, costs, and possibly punitive damages (extra penalties to punish wrongdoing).
- Penalties for Improper Garnishment by the Department: If the Department receives improperly garnished wages, it must pay the borrower twice the garnished amount within 10 days. Borrowers can seek a court injunction (a legal order to stop an action) to enforce this.
- Time Limit on Garnishment: The Department cannot garnish wages for student loans that have been in default for more than 10 years.
Significant Changes to Existing Law
- The bill amends Section 488A of the Higher Education Act of 1965, which previously allowed the Secretary broad authority to garnish up to 15% of disposable pay for defaulted student loans without court involvement.
- It introduces a mandatory suspension period, new certification hurdles to resume the program, and strict timelines for refunds and verifications—none of which existed before.
- Adds employer accountability through lawsuits, doubles penalties for the Department's errors (previously, refunds were required but without the double payment or quick timeline), and imposes a 10-year cutoff for eligible loans, limiting long-term collections.
Potential Impacts
- On Government Agencies: The Department of Education faces increased administrative burdens, such as building databases, verifying employer data quarterly, and processing rapid refunds, which could raise costs and require new staff or systems. Congressional oversight is strengthened through required reports.
- On Citizens (Borrowers): Provides stronger protections against errors in wage garnishment, faster relief for mistakes, and potential relief from collections on older debts. Low-income or vulnerable borrowers may benefit most, but the suspension could temporarily reduce federal student loan recoveries, affecting funding for education programs.
- On Employers: Increases legal risks if they fail to stop garnishments promptly, potentially leading to more compliance checks and lawsuits.
- On International Relations: Minimal direct impact, as this focuses on domestic student loan policy.
Main Stakeholders Affected
- Student Loan Borrowers: Primary beneficiaries, especially those in default facing wage garnishment; gains include protections against errors and limits on collections.
- U.S. Department of Education: Must overhaul processes, face penalties for mistakes, and report to Congress, shifting from unchecked authority to regulated operations.
- Employers: Involved in withholding wages; now subject to verification requirements and potential lawsuits for non-compliance.
- Loan Guaranty Agencies: Can pursue legal action against employers and benefit from clearer rules on collections.
- Congressional Committees: The Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Education and Workforce gain oversight through certifications and reports.
Notable Legal, Constitutional, or Political Implications
- Legal: Enhances due process protections for borrowers by mandating quick refunds and allowing injunctions against the government, potentially increasing litigation against employers and the Department. The 10-year loan limit could face challenges if seen as forgiving debt without congressional intent, but it aligns with statutes of limitations in debt collection.
- Constitutional: Supports Fifth Amendment due process by curbing arbitrary government seizures of wages and providing remedies for errors; no direct First Amendment or equal protection issues apparent.
- Political: Represents a bipartisan push (introduced by Senators Booker and Warren) for student debt relief, amid broader debates on education affordability. It could set precedents for reforming other federal collection tools, influencing future legislation on consumer protections, but might draw criticism from those favoring aggressive debt recovery to protect taxpayers.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-05-14: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-05-14: Introduced in Senate
Bill Versions
- Ending Administrative Garnishment Act of 2025 — issued 2025-05-14 — PDF (6 pages)