Eakinomics has heard a story – surely it is a fable – of a federal government financial product known as a “student loan.” But those student loans were different than the ones that roam the country in 2026: You had to pay them back! Evidently driven by a desire to finance Obamacare, the federal government put the private lenders (remember them: banks, credit unions, savings and loans?) out of the business of guaranteed lending to college students and decided to do the lending itself. The loans would be issued by the Department of Education and payment enforced, if necessary, by garnishment of wages and other sources of income. Borrowers who make no payments for 270 days are in default and the federal government can take up to 15 percent of their after-tax wages — as well as some Social Security income and all tax refunds — to repay the debt.

That was long ago and far away. With the arrival of the pandemic, payments were “paused” in 2020 and the election of Joe Biden as president ushered in an era of ceaseless inventive and often illegal attempts to simply “forgive” all student loans. Eakinomics devoted enormous amounts of its infinite rage, and a lot of column space, to damage done by the Biden Administration.

With the arrival of the Trump Administration, supposedly there was a new sheriff in town, and there would be a return to the original standards for student loans – call it the Golden Age of Student Lending. Loans would be repaid on a regular and timely basis. And if loans went into default, garnishment would be used to satisfy the debt.

According to CNBC: “The Trump administration announced in April that it would resume collection activity on student loans starting in May.” There were several false starts, but “…in December, the department confirmed around 1,000 borrowers would receive notification of intent to garnish wages during the week of Jan. 7, with more notices to follow.”

But Trump Always Chickens Out (TACO). Again, per CNBC:

The Education Department announced on Friday that it will delay the implementation of wage garnishment and other involuntary collection efforts affecting defaulted student loan borrowers.

The department said the delay affects involuntary collections on federal student loans through wage garnishments and the Treasury Offset Program, which is used to seize some or all of borrowers’ payments from the government, including tax refunds and Social Security benefits.

Now, to be clear, nobody should be in favor of widespread garnishment. That would be evidence that something is seriously amiss. But having in place the expectation that timely payment is important, and the potential for garnishment as enforcement, is part of returning the student loan enterprise to being an actual loan program. At present, it remains more grants than loans. And as long as it remains so, the potential for political misuse of taxpayer money remains too high.