Many New Yorkers Will See Paychecks Shrink Soon

Many New Yorkers are going to see their paychecks shrink very soon. Times are already getting more and more difficult for working Americans. Any help that voters thought was coming has sadly not materialized. Food inflation has increased for the fourth consecutive month, despite Trump's promises to lower grocery bills on day one of his term. According to the USDA,

"The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased 0.3 percent from March 2025 to April 2025 and was up 2.3 percent from April 2024. The CPI for all food was largely unchanged from March 2025 to April 2025, and food prices were 2.8 percent higher than in April 2024."

The USDA's food outlook predicts that prices will continue to rise throughout 2025. Prices for all food are predicted to go up 2.9 percent, while food-at-home prices are predicted to rise 2.1 percent.

New Yorkers Will Have Money Taken From Their Checks

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Under Trump's first term, in March of 2020, borrowers were protected from normal collection activities. The temporary relief officially ended after four years, in October 2024. However, President Biden decided not to pursue any involuntary collections before the end of his term. The new administration has decided to reignite collections on delinquent student loans.

On Monday, May 5, 2025, the Department of Education resumed collections of delinquent student loans. It has issued a warning to borrowers who are behind on their loan - pay up or we'll take your paychecks and federal benefits. The 195,000 student-loan borrowers who have defaulted started receiving 30-day notices from the Treasury Department. The notices let them know that their federal benefits could be subject to garnishments.

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The garnishment of paychecks and federal benefits of the almost 200,000 defaulted borrowers is just the start. As New Yorkers get hit financially from many angles, the Dept. of Ed. issued a statement saying,

"The first monthly benefit checks subject to offset are those scheduled for early June. "Later this summer, all 5.3 million defaulted borrowers will receive a notice from Treasury that their earnings will be subject to administrative wage garnishment."

Default status is applied to accounts that have not had a payment made in 270 days. The Dept. of Ed. says borrowers should be proactive and reach out to the Default Resolution Group to make a payment or set up a plan before involuntary garnishments take effect.

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