Wage garnishments were on the rise. Then the pandemic hit.

Household debt is on the rise, and the pain associated with that borrowing is starting to worsen. Personal bankruptcies are climbing, credit card delinquencies are inching up, and student loan debt has topped $1.6 trillion. In all, U.S. consumers hold nearly $17.7 trillion in debt, according to the Federal Reserve Bank of New York.

Yet wage garnishments—a last-ditch tool of debt collectors—have been falling. Court-ordered garnishments, which require employers to collect funds from an employee to fulfill financial obligations or pay debts, experienced a sharp decline in 2020 after the pandemic began. They’ve been falling since.

To calculate the garnishment rate, ADP Research analyzed ADP payroll data representing more than 57 million people between November 2018 and February 2024. We computed the garnishment rate, defined as the incidence rate per worker-month of having at least one garnishment, for each month.

For a while, wage garnishment growth was outpacing job growth.

Then the garnishment rate peaked in March 2020 at 3.9 percent. A month later, it began to fall dramatically. By January 2024, the garnishment rate was 2.8 percent.

The big driver of this epic drop was student loans.

Student loan garnishments began to fall in March 2020, pushing the rate from 0.45 percent to near zero. The U.S. Department of Education’s Fresh Start program put a full stop to student loan garnishments in April 2022.

Today, garnishments are below historic levels largely because of this freeze in student loan payments and garnishments. These federal relief programs made 2020 a paradigm-shifting year for garnishments.

More than half of the drop in the garnishment rate in 2020, from 3.9 percent in March to 3.1 percent in December, was due to a 0.4 percentage-point drop in the student loan garnishment rate, which fell from 0.5 percent to near zero.

The federal reset period for student loans is scheduled to end in September, and delinquencies on other debt, such as credit cards, are rising. Both might suggest a return to higher garnishment rates in the coming months.

For more on the practice of wage garnishments, see the ADP FAQ.