Student loan garnishment starts Jan. 1, here’s what that means
Effective Jan. 1, 2026, the federal government will begin garnishing wages for those in default on their student loans. More than five million Americans could be at risk of wage garnishment, with millions more in the coming months, according to Forbes.
Federal law
Under federal law, the Department of Education can pursue Americans who default on their payments without going through litigation. The department is required to send a 30-day notice to borrowers. After that, they can begin garnishing wages.
The department and the Trump administration are not required to track down borrowers and inform them outside of the notice. Therefore, keeping all contact information up to date is crucial to ensure you receive your notice.
The move comes after the Department of Education began reporting default student loans to credit bureaus and started seizing tax returns from borrowers who have failed to make loan payments.
Default borrowers
Not all student loan borrowers will see their wages garnished. The new policy applies only to borrowers with defaulted loans, meaning they are more than 270 days past due on payments.
Any borrowers past due who want to avoid wage garnishment must pay the amount due to bring the account current. Other options include consolidating loans, which would result in a new loan with good standing, applying for an income-driven repayment plan, and retroactive forbearance.
Those who receive a wage garnishment notice may request a hearing, but borrowers must provide evidence to justify the hearing. If the request is filed before garnishment begins, garnishment will be paused until a decision is filed.
However, if borrowers request a hearing after garnishment begins, garnishment will continue unless a decision is filed to change it.
Garnishment to begin
According to The Associated Press, the department will send notices to approximately 1,000 borrowers the week of Jan. 7, with more in each of the following months.
It’s unclear how the administration has selected whose wages will be garnished first. However, the department noted it will begin collection activities, “only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.”
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Ella Rae Greene, Editor In Chief
