Government To Re-Start Garnishing Wages On Millions Of Americans In Default On Student Loans

The federal government is resuming wage garnishment on defaulted federal student loans in early 2026, with the first notices going out the week of January 7, 2026, and the program ramping up over the course of the year. This only affects borrowers who are in default (generally more than 270 days past due), not everyone with student loans.​

What is happening

• The U.S. Department of Education will restart “administrative wage garnishment” for federal student loan borrowers in default, after a multi‑year pandemic pause.​

• Around 1,000 defaulted borrowers will receive the first garnishment notices the week of January 7, 2026, with more added each month; ultimately millions of defaulted borrowers could be affected.​

• When garnishment starts, employers can be ordered to withhold up to 15% of a borrower’s disposable pay to cover the defaulted federal loans.​

Who can be garnished

• Only borrowers with federal student loans in default (usually 270+ days without required payment) are subject to this federal administrative wage garnishment.​

• Private student loans follow different rules; creditors usually must sue and get a court judgment before wages can be garnished, and state limits apply.​

How to avoid or stop garnishment

If you are worried you might be in default or close to it, acting before a garnishment order hits your employer gives you more options.​

• Check your status at StudentAid.gov to see if any federal loans show as “in default,” and contact your servicer or the Default Resolution Group if they do.​

• Ask about:

  • Loan rehabilitation (making a series of agreed payments to bring the loan out of default).

  • Loan consolidation into a new Direct Consolidation Loan.

  • Enrolling in an income‑driven repayment (IDR) plan once out of default so payments match your income.​

• If you get a garnishment notice, you generally have at least 30 days before it starts to request a hearing, contest the amount, or set up a repayment agreement.​

If you share whether your loans are federal or private and whether you’re in default, it is possible to outline more specific, step‑by‑step next moves.

For federal student loans in default, wage garnishment is generally calculated as up to 15% of your disposable pay, but only from the amount above a protected minimum tied to the federal minimum wage.​

Basic federal formula

• Your loan holder can order your employer to withhold up to 15% of your disposable pay (your take‑home pay after mandatory deductions like taxes and Social Security).​

• Federal law requires you be left with at least 30 times the federal minimum wage per week (currently $7.25\times 30=217.50$ per week), so amounts at or below that are fully protected from garnishment.​

How the protected minimum works

• If your weekly disposable earnings are $217.50$ or less, nothing can be garnished for federal student loans.​

• If your weekly disposable earnings are higher, the garnished amount will be the lesser of:

  • 15% of your disposable pay, and

  • The portion of your pay above $217.50$ per week.​

Interaction with other garnishments

• The 15% federal student loan garnishment counts toward the overall federal limit that generally caps total garnishments at 25% of disposable earnings for most debts.​

• If you already have another garnishment (like a judgment from a private creditor), the combined total usually cannot exceed that general 25% cap, so the student loan amount may be reduced or blocked.​

Example (rough illustration)

• Suppose disposable pay is 800 per week.

  • 15% of 800 = 120.

  • Amount above the protected 217.50 is 582.50, so 120 is allowed and could be garnished.

• If disposable pay were 300 per week:

  • 15% of 300 = 45.

  • Amount above 217.50 is 82.50, so 45 could be garnished, leaving at least 217.50.​

If you tell the approximate amount of your take‑home pay per pay period and how often you are paid, it is possible to run a more specific estimate of what your garnishment would look like.