WASHINGTON — The Department of Education will resume garnishing wages of borrowers with defaulted federal student loans starting in January, the agency confirmed.
The move marks the first major step in student debt collections since the COVID-19 pandemic temporarily halted such actions in 2020.
“Borrowers will receive notices before any wage garnishments begin, providing ample opportunity to resolve their debts,” a Department of Education spokesperson said.
“All collections activities are conducted under the Higher Education Act of 1965 and the Debt Collection Improvement Act of 1996.”
In March 2020, the federal government paused referring student loans to collections at the onset of the pandemic.
The suspension included wage garnishments and Social Security seizures, offering relief to millions of borrowers facing economic uncertainty.
In May, the Trump administration announced it would resume collection efforts, including garnishing up to fifteen percent of borrowers’ wages after taxes.
The first notices are expected to reach roughly one thousand borrowers during the week of January 7, with the number increasing in the following months, according to the Department of Education.
At the time of the announcement, federal student loans affected approximately 43 million borrowers, totaling $1.6 trillion in outstanding debt.
Experts say the decision to restart wage garnishments could have significant financial implications for borrowers.
“Even a small percentage deducted from wages can disrupt household budgets, particularly for those already managing multiple debts,” said Maria Hernandez, a senior analyst at the Student Debt Policy Institute.
“However, it is a legal tool the government can use to recover defaulted loans and minimize taxpayer losses.”
Policy analysts also noted that garnishment provides a structured repayment method for borrowers who may have struggled to make payments otherwise.
“Garnishments are designed to be incremental and prevent borrowers from falling deeper into delinquency,” said Thomas Yates, a financial aid consultant in Washington.
“The key is transparency and advance notice, which the department has emphasized.” Federal student loan defaults have long been a concern.
According to Education Department data, roughly 10 percent of borrowers enter default within two years of missing payments.
Comparatively, wage garnishment is one of the more effective federal recovery tools, recovering between 60 and 70 percent of defaulted debt once implemented.
During the COVID-19 pause, the federal government refrained from collections, while private lenders in some states continued garnishments, creating uneven financial pressure for borrowers.
Borrowers express mixed feelings about the resumption of wage garnishments.
“I understand I owe the money, but fifteen percent of my paycheck is a lot for someone like me trying to support a family,” said James Carter, a New Jersey resident and borrower with two defaulted federal loans.
Others see it as an opportunity to regain financial stability. “I’ve been behind on my loans for years, and having a structured repayment through wage garnishment might actually help me get out of default,” said Nicole Rivera, a teacher in Texas.
Meanwhile, lawmakers have pushed back against the collections efforts. In May, Rep. Ayanna Pressley, D-Mass., and Senators Elizabeth Warren, D-Mass., and Cory Booker, D-N.J., introduced legislation to suspend wage garnishments, tax refund seizures, and Social Security deductions for student loan borrowers.
“No one should have their hard earned wages or benefits seized,” Pressley said in a statement. “Our bill would protect vulnerable borrowers and prevent further financial strain.”
The Department of Education has indicated that the collections process will expand gradually, with the initial phase targeting approximately one thousand borrowers.
Officials say the agency will continue issuing notices and provide avenues for borrowers to repay before garnishments begin.
President Trump has also proposed a broader restructuring of the Department of Education, suggesting that student loan functions could eventually transfer to other agencies such as the Department of the Treasury.
Analysts caution that such changes could affect enforcement and borrower protections. As federal student loan collections resume, thousands of borrowers face the prospect of wage garnishment for the first time since the pandemic.
While the move is legally sanctioned under existing federal law, it underscores the ongoing challenges of managing a $1.6 trillion student debt landscape.
Officials and experts emphasize that borrowers will receive notices and opportunities to address their debts before any deductions occur, reflecting a balance between debt recovery and borrower protections.
