Student Loan Debt Collection Begins For Borrowers

Student loan debt collection has restarted for federal borrowers who are in default, and the first wave of wage-garnishment notices is going out in early 2026. If your federal loans are current or just in repayment, this specific collections restart does not apply to you.​

What is starting now

• The Department of Education has resumed involuntary collections (like wage garnishment and tax refund seizure) on defaulted federal student loans after a multi‑year pandemic pause.​

• Around 1,000 defaulted borrowers are receiving 30‑day warning notices this week, with many more notices scheduled in the following months.​

• This is in addition to Treasury “offsets,” where tax refunds and some federal benefits can be intercepted to repay defaulted loans.​

Who is affected

• Borrowers with federal student loans that have been in default, typically after about 270 days of missed payments on a standard repayment schedule.​

• Both Direct Loans and defaulted FFEL loans held by or guaranteed by the federal government can be subject to these collections.​

• Private student loans are not part of this federal collections restart, though private lenders have their own collection powers under state law.​

What collections can look like

• Wage garnishment: Up to 15% of take‑home pay can be taken directly from a paycheck without a court judgment for defaulted federal loans.​

• Tax refund and benefit offset: Federal tax refunds and certain federal benefits, including some Social Security payments above a protected minimum, can be seized.​

• Credit and fees: Default can lead to damaged credit, added collection costs, and acceleration of the full loan balance as immediately due.​

How to protect yourself if you might be in default

• Confirm your status: Log in to StudentAid.gov or call the Federal Student Aid Information Center (1‑800‑433‑3243) to see whether your loans are in default and who your servicer or collection agency is.​

• Ask about options to get out of default before garnishment starts, such as:

  • Loan rehabilitation (usually 9 affordable payments in 10 months).

  • Consolidation into a new Direct Loan with an income‑driven plan.

  • Paying in full, if possible.​

If you already received a notice

• Read the 30‑day notice carefully; it explains your right to request a hearing, propose a lower payment based on income, or challenge the debt if you believe there is an error.​

• Contact the Default Resolution Group or the agency listed on the notice immediately to set up a repayment or rehabilitation plan and ask them to halt the garnishment while you work out an agreement.​

• Consider speaking with a nonprofit student loan counselor or legal aid organization if you need help reviewing options or disputing the garnishment.​