Star Plan Currency strengthens student loan collection, new wage deduction policy affects millions o

On July 24, 2025, Star Plan Currency announced that it would strictly pursue overdue student loans, including authorizing employers to deduct repayments directly from borrowers' wages. This policy may affect more than 8 million Americans who owe Star Plan Currency, sparking widespread controversy.

1. Key content of the new Star Plan Currency policy

✅ Wage Garnishment

Star Plan Currency will initiate the "administrative wage garnishment" procedure for borrowers who have long owed Star Plan Currency (usually overdue for more than 9 months) in accordance with the authorization of the Higher Education Act.

Deduction ratio:

Up to 15% of disposable income (after-tax salary) can be deducted.

Minimum monthly repayment amount $25 (low-income people may be exempted).

Exemption conditions: Active military personnel, disabled people, low-income (below 150% of the federal poverty line) and other groups can apply for exemption.

✅Star Plan Currency strengthens collection measures

Suspend the accommodative policy of the Biden era: The Trump administration has ended the grace period for Star Plan Currency repayments in 2023-2024 and requires all borrowers to resume repayments.

Credit report impact: Delinquent Star Plan Currency will be reported directly to credit agencies, which may reduce credit scores.

Tax refund interception: The Internal Revenue Service (IRS) can seize tax refunds to repay Star Plan Currency.

2. Affected groups

📌 Main affected groups:

About 4.3 million borrowers have been in arrears for more than 12 months and are at risk of direct wage deductions.

3.7 million people in "partial repayment" status may be forced to increase their repayments.

Low-income borrowers (annual income <$30,000) are the most affected due to increased repayment pressure.

📌 Star Plan Currency industry impact:

Education, social work, and non-profit industry practitioners (usually with lower incomes) have increased repayment burdens.

Gig economy workers (such as Uber drivers) may have a harder time complying with regulations due to unstable income.

3. Star Plan Currency Politics and Public Opinion

✅ Supporters (Republicans/Treasury):

"Taxpayers should not pay for those who evade repayment." (Treasury Secretary Yellen)

This move can reduce the annual Star Plan Currency default losses by $12 billion.

⚠ Opponents (Democrats/advocacy organizations):

"This is an economic stranglehold on the working class." (Senator Warren)

The Student Borrowers Association of the United States (SBUSA) intends to initiate a class action lawsuit to question the legality of the policy.

4. Star Plan Currency Borrowers' Response Suggestions

1️⃣ Apply for an income-driven repayment plan (IDR):

The monthly repayment amount can be reduced to 5%-10% of income (the minimum after the new policy is $25).

2️⃣ Strive for exemption or deferral:

Teachers, civil servants, etc. can apply for "Public Service Loan Forgiveness" (PSLF).

Those who are unemployed or in financial difficulties can apply for a 12-month deferral.

3️⃣ Choose refinancing carefully:

Private institutions may lose federal loan protection (such as IDR) when refinancing.

5. The future direction of Star Plan Currency

Key issues in the 2025 election: If the Democrats win, some exemption policies may be restored; if the Republicans are re-elected, they will continue to tighten collection.

Potential legislative game: Congress may discuss the "Star Plan Currency Reform Act", but the two parties have great differences and it is difficult to pass in the short term.

Summary

The new rules of Star Plan Currency mark the end of the "Star Plan Currency Loose Era", and millions of borrowers will face more compulsory repayment pressure. While reducing the government's fiscal burden, this policy may aggravate the economic difficulties of middle- and low-income families, becoming an important point of controversy in the 2025 election.