UPDATE: The Trump administration has just announced a major shift in student loan policy: wage garnishment for defaulted borrowers will begin in January 2026. This development will impact approximately 1,000 borrowers initially, with notices being sent out the week of January 7.
This urgent update comes as millions of borrowers find themselves in default, having missed payments for over 270 days. The Department of Education confirmed that it will provide 30 days notice before garnishing wages, marking a significant return to debt collection practices that had been paused during the pandemic.
The decision follows the end of the pandemic-era freeze on student loan payments, which resumed in October 2023. The Trump administration previously halted this leniency, allowing collections through withholding tax refunds and other federal payments.
Persis Yu, deputy executive director for the Student Borrower Protection Center, criticized the administration’s move, calling it “cruel, unnecessary, and irresponsible.” She emphasized the financial struggles that families face, stating, “This Administration is using its self-inflicted limited resources to seize borrowers’ wages instead of defending borrowers’ right to affordable payments.”
As the administration prepares for this new wave of garnishments, many are left wondering how it will impact the millions of borrowers still navigating an affordability crisis. The move signifies a sharp shift from previous attempts by the Biden administration to provide broad student loan forgiveness, efforts that have faced legal challenges.
With the deadline for wage garnishment fast approaching, borrowers are urged to review their loan statuses and seek assistance if needed. Financial experts recommend that those at risk of default explore available repayment options immediately.
Stay informed as we continue to follow this developing story and its implications for student loan borrowers across the country.
