Student Loan Borrowers In Default May Soon See Their Wages Garnished

The Trump administration has announced that it will restart garnishing the wages of federal student loan borrowers who are in default, beginning in early 2026, with first notices going out the week of January 7, 2026. This comes after collections on defaulted federal student loans, including wage garnishment, were paused during the pandemic and then gradually restarted in 2025 through tax refund and benefit seizures.​

What is changing

• The Education Department plans to begin administrative wage garnishment again for defaulted federal student loans after roughly a five‑year pause.​

• Around 5–5.5 million borrowers are currently in default and could eventually see a portion of their paychecks taken if they do not resolve their defaulted loans.​

When garnishment starts

• The department expects to send the first wage‑garnishment notices to about 1,000 defaulted borrowers the week of January 7, 2026, then ramp up notices monthly through 2026.​

• Collections on defaulted loans already resumed in May 2025 through the Treasury Offset Program, which allows seizure of tax refunds and some federal benefits, and wage garnishment is the next step in that process.​

How wage garnishment works

• Once a federal student loan has been in default for more than 270 days, the government can collect by intercepting tax refunds, taking certain Social Security benefits, and ordering employers to withhold part of a borrower’s pay.​

• Under administrative wage garnishment, the Education Department (or its contractors) can direct a non‑federal employer to withhold up to 15% of a borrower’s disposable wages to repay defaulted federal student loans.​

Notice and borrower rights

• Borrowers are supposed to receive a written notice at least 30 days before wage garnishment begins, explaining the amount owed and the plan to garnish wages.​

• During this notice window, borrowers can request a hearing to challenge the garnishment (for example, if the debt is not owed or the garnishment would cause financial hardship) and may be able to pause or reduce the garnishment through that process.​

Ways to avoid or stop garnishment

• Borrowers in default may avoid wage garnishment by getting out of default before it starts, typically through loan rehabilitation or consolidation into a new loan and then enrolling in an income‑driven repayment plan.​

• The Education Department and borrower‑assistance groups advise contacting the Default Resolution Group or a reputable nonprofit counselor as soon as possible, because once garnishment begins, resolving the default can take longer and is more disruptive to monthly income.​