US student loan borrowers in default face wage garnishment in 2026 as Trump administration restarts federal collections
The Trump administration plans to resume aggressive collection efforts against federal student loan borrowers who are in default, including garnishing wages early next year. The move marks a sharp shift from pandemic-era leniency that paused most enforcement actions for nearly four years.Federal officials said notices will begin going out in January, signalling the formal restart of wage withholding and other recovery tools. Millions of borrowers remain behind on payments after repayment obligations resumed following the public health emergency.
Restart of wage garnishment processThe US Department of Education said it will begin sending notices to about 1,000 borrowers during the week of January 7, with the number rising each month. Borrowers must receive at least 30 days’ notice before any wage garnishment can begin, according to the department.A department spokesperson said collection activities will start “only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans,” in a statement quoted by the Associated Press. Borrowers are considered in default once they are 270 days past due on required payments.End of pandemic-era protectionsFederal student loan payments were paused beginning in March 2020, and no loans, including those already in default, were referred for collection during that period. The payment pause ended earlier this year, when the Trump administration moved to resume enforcement.In May, the administration began collecting on defaulted student loans by withholding tax refunds and other federal payments, according to details cited by the Associated Press. Although regular monthly payments restarted in October 2023, the Biden administration had extended a one-year grace period that limited penalties for missed payments.Previous forgiveness efforts blockedThe Biden administration pursued several initiatives aimed at broad student loan forgiveness, but those plans were halted after court challenges, the Associated Press noted. As a result, borrowers who did not resume payments now face renewed collection actions.Criticism from borrower advocatesPersis Yu, deputy executive director of the Student Borrower Protection Center, criticised the decision to move ahead with wage garnishment. “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 issued by her organisation and quoted by the Associated Press.
