The federal government will resume wage garnishment for student loan borrowers in default beginning in early 2026, ending a pandemic-era pause on one of the most aggressive federal debt collection tools.
According to the U.S. Department of Education, the government will begin sending notices the week of January 7, 2026, informing borrowers that their employers may soon be required to withhold a portion of their paychecks to collect overdue federal student loan debt. Initial notices will go out to roughly 1,000 borrowers, with the number expected to increase monthly.
Federal student loan borrowers are considered in default after 270 days without payment. Under federal law, borrowers must receive at least 30 days’ notice before wage garnishment begins and are given the opportunity to challenge the action or arrange alternative repayment plans.
The move formally ends the collection freeze that began in March 2020 during the COVID-19 pandemic, when the federal government halted wage garnishment, tax refund seizures, and other collection efforts on defaulted student loans. Earlier this year, the Trump administration restarted collections by resuming the interception of federal tax refunds and certain Social Security benefits from borrowers in default.
The Education Department estimates that approximately 5.3 million borrowers remain in default nationwide.
The resumption of wage garnishment comes amid broader changes to the federal student loan system following legislation passed this year that reduced and consolidated repayment plan options. Administration officials say borrowers will still have pathways to avoid garnishment by entering repayment or rehabilitation programs before employer withholding begins.
Critics argue the policy could increase financial pressure on borrowers already struggling with rising costs, while administration officials maintain that enforcing repayment is necessary to protect taxpayers and restore accountability to the federal student loan program.
