Student Loan Collections Expand With Wage Garnishment in 2026/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The Trump administration plans to begin garnishing wages of defaulted student loan borrowers in early 2026. Millions of borrowers are in default after pandemic-era protections ended. Advocates warn the move could worsen financial strain for struggling families.
Student Loan Wage Garnishment Quick Looks
- Wage garnishment for defaulted student loans is set to begin in early 2026
- Notices will start going out to borrowers in January
- Borrowers must receive 30 days’ notice before garnishment begins
- Millions of federal student loan borrowers remain in default
- Pandemic-era protections and grace periods have ended
- Consumer advocates criticize the policy as harmful and unnecessary
Deep Look: Student Loan Wage Garnishment
The Trump administration announced Tuesday that it will begin garnishing the wages of federal student loan borrowers who remain in default, marking a major escalation in collection efforts after years of pandemic-era leniency. The move is expected to take effect early next year and could impact millions of borrowers who have fallen behind on their payments.
According to the U.S. Department of Education, notices will begin going out to roughly 1,000 borrowers during the week of January 7. Officials said the number of notices will increase each month as the department ramps up its collection activities. By law, borrowers must receive at least 30 days’ notice before their wages can be garnished.
Federal student loan borrowers are considered in default when they are at least 270 days past due on their payments. While wage garnishment has long been a tool available to the federal government, it had not been used widely in recent years due to emergency protections enacted during the COVID-19 pandemic.
The department emphasized that garnishment would only begin after borrowers are given sufficient notice and opportunities to repay or resolve their loans. Officials said the goal is to resume normal collection operations while complying with all legal requirements.
The announcement follows a broader rollback of pandemic-era relief programs. In May, the Trump administration ended the pause on student loan collections that had been in place since March 2020. That decision allowed the federal government to begin collecting defaulted debt by withholding tax refunds and other federal payments owed to borrowers, such as Social Security benefits.
Although required monthly student loan payments resumed in October 2023, borrowers initially received a yearlong grace period under the prior administration. During that time, missed payments did not result in defaults or referrals to collections. That grace period has since expired, and borrowers who failed to resume payments are now increasingly vulnerable to enforcement actions.
The return to aggressive collection efforts marks a sharp contrast with policies pursued by the previous administration. Former President Joe Biden attempted multiple times to implement broad student loan forgiveness programs, but those efforts were ultimately blocked by federal courts. With those initiatives halted, the focus has shifted back to repayment and enforcement.
The scale of the issue is significant. Millions of borrowers remain in default, many of whom accumulated debt years ago and struggled to resume payments after the pandemic. For these borrowers, wage garnishment can have immediate and severe financial consequences, reducing take-home pay and complicating household budgets already strained by inflation and rising living costs.
Consumer advocates strongly criticized the administration’s decision. Student Borrower Protection Center argued that the government has not done enough to help borrowers access affordable repayment options before turning to punitive measures.
Persis Yu, the organization’s deputy executive director, said the policy reflects misplaced priorities. Yu warned that wage garnishment could push struggling families further into financial distress at a time when many Americans are grappling with stagnant wages and high prices.
“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 in a statement. She added that millions of borrowers are on the brink of default and that federal resources should be used to expand access to affordable repayment plans rather than seize wages.
Under federal law, wage garnishment for student loans can occur without a court order, unlike most other forms of debt collection. Employers are required to withhold a portion of a borrower’s disposable income and send it directly to the government, a process that can continue until the debt is resolved or brought out of default.
Borrowers facing garnishment typically have limited options, though they may request a hearing, enter into a rehabilitation program, or consolidate their loans to stop the process. However, advocates note that many borrowers are unaware of these options or face administrative hurdles when trying to enroll.
The Department of Education has said it plans to expand outreach efforts and provide borrowers with information about repayment programs, including income-driven repayment plans. Still, critics argue that existing systems are confusing and difficult to navigate, especially for borrowers who have been out of repayment for several years.
The resumption of wage garnishment also raises broader questions about the future of student loan policy in the United States. With courts blocking mass forgiveness and lawmakers divided over reform, borrowers face an uncertain landscape in which enforcement tools are returning faster than relief measures.
Supporters of the administration’s approach argue that enforcing repayment is necessary to protect taxpayers and maintain the integrity of the federal loan program. They contend that long-term pauses and forgiveness efforts risk encouraging nonpayment and undermining the system.
Opponents counter that aggressive collections ignore the underlying causes of default, including rising education costs, uneven wage growth, and administrative failures. They argue that garnishment may recover some funds in the short term but ultimately exacerbates inequality and financial instability.
As the federal government prepares to expand wage garnishment in 2026, borrowers in default are being urged to act quickly. Financial counselors and advocacy groups recommend reviewing loan status, contacting loan servicers, and exploring rehabilitation or repayment options before garnishment begins.
The coming months are likely to bring heightened scrutiny of the administration’s student loan policies, particularly as more borrowers receive notices and feel the financial impact. For millions still struggling to recover from the economic disruptions of recent years, the return of wage garnishment represents a stark reminder that the era of pandemic-era relief is firmly over.
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