Student loan borrowers in default could see wage garnishments begin in 2026

The Trump administration recently announced its plans to resume garnishing the wages of certain student loan borrowers who are in default starting in early 2026. This decision has raised concerns among advocacy groups for student loan borrowers, including Protect Borrowers.

According to The Associated Press, about 1,000 borrowers in default can expect to receive wage garnishment notices starting the week of Jan. 7, with an increase in the number of notices to be sent out on a monthly basis thereafter. The Education Department stated that involuntary collection through wage garnishment would only occur after borrowers have been given sufficient notice and opportunity to repay their loans. However, the exact amount of wages that could be garnished from those in default remains unclear.

Persis Yu, deputy executive director and managing counsel of Protect Borrowers, criticized the administration’s decision to resume wage garnishment, calling it “cruel, unnecessary, and irresponsible” especially in light of the financial challenges faced by many families across the country.

Federal student loan borrowers enter default status after missing payments for at least 270 days, and they must receive a minimum of 30 days’ notice before wage garnishment can begin. The pause on student loan repayments, implemented in response to the COVID-19 pandemic, ended in Oct. 2023 after Congress blocked further extensions.

The Education Department signaled its intention to resume wage garnishment for defaulted borrowers in May of this year, as part of efforts to address the increasing number of borrowers in default. The department estimated that over 5 million borrowers were in default at the time of the announcement, with a potential for 4 million more to join them in default in the following months.

Former President Joe Biden’s attempts to forgive student loan debt for millions of borrowers were unsuccessful, as court rulings rejected his proposals. However, the Biden administration did manage to eliminate student loan debt for more than 5 million borrowers through other forgiveness programs. Education Secretary Linda McMahon emphasized the importance of helping borrowers return to repayment for their financial well-being and the nation’s economic stability.

In conclusion, the decision to resume wage garnishment for defaulted student loan borrowers has sparked debate and criticism from advocacy groups. With the number of borrowers in default expected to rise, the administration’s emphasis on responsible loan management and repayment is aimed at ensuring the long-term financial health of borrowers and the stability of the student loan program.