US EditionEducation Department to delay collections on defaulted student loans
The pause gives about 9 million defaulted borrowers time to access new income-driven repayment options starting July 1, 2026, under reforms from the Working Families Tax Cuts Act.
- On Friday, the U.S. Department of Education delayed involuntary collections including Administrative Wage Garnishment and the Treasury Offset Program to finalize new repayment plans.
- The Department is pausing collections to implement changes from the Working Families Tax Cuts Act, which simplifies repayment options and adds a second chance to rehabilitate a defaulted loan.
- Earlier this month the Department began sending wage-garnishment notices to some borrowers, with about 1,000 notices sent that could deduct up to 15% of a borrower’s paycheck.
- By pausing collections the Department still allows credit reporting of defaults to continue, and officials warned borrowers’ credit scores may be harmed without a new timeline for collections.
- A new income-driven repayment option launching July 1, 2026, will waive unpaid interest for on-time payments and include small matching payments from the Department.
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59 Articles
Trump Admin Pauses Tax Refund Seizures, Wage Garnishments for Defaulted Student Loans
The U.S. Department of Education will suspend, for now, tax refund seizures and wage garnishments for people in default on their federal student loans. The suspensions took effect on Jan. 16 and do not yet have a specific end date. The pause on wage garnishments will allow time to implement changes to repayment plans under President Donald Trump’s sweeping tax and spending package, the One Big Beautiful Bill Act, according to a statement from th…
US Education Department delays plan to garnish wages of student borrowers in default • Kentucky Lantern
U.S. Education Secretary Linda McMahon takes in a selection of grade school students’ patriotic artworks and high schoolers’ recent output in a special installation set up at Exeter-West Greenwich Regional Junior High and High School in Rhode Island on Monday, Jan. 12, 2026. (Photo by Alexander Castro/Rhode Island Current)WASHINGTON — The U.S. Department of Education, for now, is backtracking on plans to garnish wages and seize tax refunds of st…
Nebraska Examiner
US Education Department delays plan to garnish wages of student borrowers in default
U.S. Education Secretary Linda McMahon takes in a selection of grade school students’ patriotic artworks and high schoolers’ recent output in a special installation set up at Exeter-West Greenwich Regional Junior High and High School in Rhode Island on Monday, Jan. 12, 2026. (Photo by Alexander Castro/Rhode Island Current)WASHINGTON — The U.S. Department of Education, for now, is backtracking on plans to garnish wages and seize tax refunds of st…
Associated Press News
Trump administration delays plan to withhold wages for student loan borrowers in default
The Trump administration is delaying its plans to withhold pay from student loan borrowers who default on their payments, backing off a measure that threatened to deliver a financial blow to millions of Americans.
Education Department delays wage garnishment for defaulted student loan borrowers
The Education Department said Friday it would delay plans to garnish the wages of federal student loan borrowers who are in default. The department said it will temporarily delay wage garnishment for those who haven't paid toward their loans in more than nine months as new student loans reforms are implemented this year. It previously [...]
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