The Education Department announced it will resume wage garnishment for federal student loan borrowers in default early in 2026, sending initial notices to about 1,000 people the week of Jan. 7 and scaling up monthly. Borrowers are considered in default after 270 days past due and must receive at least 30 days' notice before garnishment. Collections resumed earlier this year after the pandemic-related pause ended; advocates say the move risks harming families who lack affordable repayment options.
Wage Garnishment for Defaulted Student Loans to Resume in Early 2026; Notices Begin Week of Jan. 7
La Universidad de Harvard en Cambridge, Massachusetts, el 30 de septiembre del 2025. (AP foto/Charles Krupa)
The U.S. Education Department announced Tuesday that it will resume garnishing the wages of federal student loan borrowers who are in default early next year, sending initial notices to about 1,000 borrowers the week of Jan. 7 and increasing the number of notices each month.
Millions of federal loan holders are currently classified as in default — defined as being 270 days past due on payments. Federal rules require the department to provide borrowers at least 30 days' notice before initiating wage garnishment.
The department said it will begin collection actions "only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans." Notices sent in January are intended to start a phased process, with the scope of collections expanding in subsequent months.
In May, the administration ended the pandemic-era pause on federal student loan payments and resumed collection on defaulted debt, including steps such as withholding tax refunds and other federal payments. That move effectively ended a period during which most federal loans, including some already in default, were not referred for collection; borrowers had not been referred for collections since March 2020 until changes implemented earlier this year.
Federal loan payments resumed in October 2023, and the Biden administration had previously extended a one-year grace period after the restart. The Biden administration also pursued broad student loan forgiveness proposals, but those efforts were halted by the courts.
Criticism From Borrower Advocates
Persis Yu, deputy executive director of the Student Borrower Protection Center, sharply criticized the decision, saying the department had not done enough to help borrowers secure affordable repayment options.
"At a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration's decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible," Yu said. "As millions of borrowers sit on the precipice of default, this Administration is using its self-inflicted limited resources to seize borrowers' wages instead of defending borrowers' right to affordable payments."
The Education Department says its approach will include notice and opportunity to repay before taking direct collection action, but advocates argue more proactive help with affordable repayment options is needed to prevent deepening financial hardship for affected families.
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