Ending Administrative Garnishment Act of 2025
The Ending Administrative Garnishment Act of 2025 would pause the federal government’s authority to garnish the disposable pay of defaulted federal student loan borrowers under the Higher Education Act, effective on enactment. After a one-year minimum period, the Secretary of Education must submit a certification to Congress describing either (A) a implemented process that guarantees quick refunds for improper garnishments, gives the Secretary the ability to halt the program if needed, and requires quarterly, detailed verifications from employers; or (B) that the garnishment program cannot be implemented and should not apply. If the certification is not provided, or if the Secretary cannot certify, the garnishment authority would be suspended or halted. If certification is achieved, a centralized database would be created to track affected borrowers and ongoing garnishments, with annual reporting to Congress. The bill also adds penalties for improper wage withholding by employers, creates potential remedies for borrowers, requires prompt refunds for improper garnishments (double the garnished amount within 10 days), and places a 10-year cap on garnishment for loans outstanding longer than a decade. Overall, the bill aims to reform and restrict current wage-garnishment practices while increasing oversight, borrower protections, and employer accountability.
Key Points
- 1Suspension and conditional revival of wage garnishment authority
- 2- The discretionary wage-garnishment authority under subsection (a) is suspended starting at enactment until the Secretary submits a certification to Congress. The certification must occur no earlier than one year after enactment and determine whether the Secretary can implement a reform process or must conclude garnishment should not apply.
- 3Certification requirements (two-option framework)
- 4- Option A: The Secretary has implemented a process guaranteeing refunds for improper garnishments within one calendar week, can independently cease/suspend the program, and collects quarterly employer verifications on garnishment details.
- 5- Option B: The Secretary cannot implement the process and determines garnishment shall not apply to individuals.
- 6- If either option is certified, garnishment continues or stops according to the certification.
- 7Data collection and reporting
- 8- If Option A is certified, a centralized database must be created with contact, employment, and demographic data for individuals whose disposable pay was garnished prior to enactment and those currently subject to garnishment.
- 9- A baseline report within 90 days of database creation, followed by annual reports, summarizing the data and evaluating the use of the authority.
- 10Employer accountability and borrower remedies
- 11- Employers can be sued by the Secretary, the guaranty agency, or an individual borrower for improper wage withholding, including refund of amounts withheld, actual damages, attorneys’ fees, costs, and potentially punitive damages.
- 12Protections and remedies for improper garnishment
- 13- If the Secretary receives an individual’s improperly garnished disposable pay, the borrower must be paid twice the garnished amount within 10 days. Injunctive relief against the Secretary is permitted to enforce this provision.
- 14Limitation on use
- 15- The Secretary may not garnish the disposable pay of a borrower for loans outstanding more than 10 years.