US EditionWhat Student Loan Borrowers Can Do if They're Facing Wage Garnishment: 'Early Action' Is Critical, Advisor Says
The Education Department notified 1,000 defaulted borrowers of wage garnishments restarting after pandemic pauses, targeting up to 15% of disposable income for federal loan recovery.
- This week, the U.S. Department of Education began sending notices to at least 1,000 defaulted borrowers and will increase notices monthly as it resumes wage garnishments paused since 2020.
- Federal rules define default as being at least 270 days late, with more than 5 million U.S. borrowers currently in default and only 38 percent of 42.7 million total borrowers up-to-date; Stanley Tate, attorney, says many default due to unawareness of repayment options.
- Federal rules require advance notices: borrowers get 65 days before federal payment interception and 30 days before wage garnishment, employers withhold up to 15%, and borrowers can request hearings or loan rehabilitation with nine on-time payments.
- Many borrowers warn that garnishment deepens financial hardship, as nearly 400,000 debtors refunded in 2021 received over $185 million after illegal withholdings caused severe harms.
- Policy context shows the department already resumed Treasury Offset on May 5, 2025, and borrowers can avoid garnishment by negotiating repayment within 30 days or entering rehabilitation with payments as low as $5.
12 Articles
12 Articles
Trump Administration Decision Brings Back Involuntary Wage Garnishments For Defaulted Student Loan Borrowers
By Tevon Blair ·Updated January 9, 2026 Getting your Trinity Audio player ready… As unemployment rates continue to rise, the Trump Administration is set to resume wage garnishments for student loan borrowers in default as early as this month. This decision would become the first time the federal government would enforce loan repayments since collections were paused in March 2020 as a result of the global COVID-19 pandemic. Between March 2020 and…
Student loan debt: What to know about wage garnishment
A pandemic‑era pause on federal student loan collections has come to an end. “The clock is ticking,” said Ted Rossman, senior analyst at Bankrate, as the Trump administration moves forward with plans to garnish the wages of millions of borrowers who are behind on their federal student loans. “Wage garnishment basically means that a lender — or in the case of federal student loans, the federal government — can seize some of your paychecks,” Ros…
Student loan borrowers: The Education Department is garnishing wages for millions in default. Here is who is affected and how much they can take
Wage garnishment "is a scary concept since they can take 15% of after-tax income," Ashley Morgan, debt and bankruptcy attorney and owner of Ashley F. Morgan Law PC, told Fortune.
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