Trump admin will start garnishing the wages of thousands, including some KY residents
Kentucky residents who are behind in their student loan payments could start seeing smaller paychecks beginning this year.
That’s because President Donald Trump’s administration said it will begin to garnish paychecks of student loan borrowers who have defaulted — meaning the debt has remained stagnant and unpaid for at least 270 days.
Around 1,000 defaulted student loan borrowers in the U.S. will receive notices this week, with the number increasing every month, the U.S. Department of Education told NPR this week. This is the first time collections on student loans will resume since the pandemic in 2020.
So, what is wage garnishment? And exactly how many people in Kentucky have student loans to pay off? Here’s what to know.
What is a wage garnishment?
There are three ways the government can collect payment on defaulted student loans — withholding tax refunds, withholding federal payments and withholding money from the borrower’s paycheck, also called wage garnishment.
The companies that hold the loans can order employers to withhold up to 15% of the borrower’s paycheck to collect the debt. Notices must be sent out 30 days prior to the first wage garnishment, and borrowers have the right to file for a hearing if they reject the lender’s action, studentaid.gov says.
If the borrower believes withholding that percentage of money could lead to financial hardship, if they object to its existence, amount or the enforceability, or if the borrower has been employed for less than 12 months, they can file for a hearing. A request for a hearing should be made within 30 days of receiving the garnishment notice in the mail.
Borrowers should contact their loan carrier to see how they can request a hearing. Hearing proceedings can be held in person in Atlanta, Chicago or San Francisco, over the phone or virtually through documents submitted in the case. A decision on the hearing would be made within 60 days.
How many Kentuckians currently have unpaid student loans?
According to the Education Data Initiative, 13.4% of all Kentucky residents, or about 614,000 individuals in the commonwealth, have student debt. The average debt per borrower sits at about $33,691.
Looking at the data closer, 47.8% of borrowers are younger than 35. More than 21% owe between $20,000 and $40,000, while 1.61% owe more than $200,000, according to the data. The state has a total of $20.7 billion in student loan debt.
Data from university exploration site CollegeRaptor shows Kentucky State Univeristy has the highest rate of graduates defaulting on their student loans. Transylvania University has the lowest student default rate in the state.
Here are the five Kentucky higher education institutions with the highest rate of students defaulting on loans within two years of graduation:
- Kentucky State University
- Beckfield College-Florence (Florence)
- Sullivan University (Louisville)
- Lindsey Wilson College (Columbia)
- Union College (Barbourville)
CORRECTION: This article was updated Jan. 12 to correct a reporting error to the universities with the highest two-year rate of loan default.
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This story was originally published January 10, 2026 at 7:00 AM.
