AT A GLANCE
- The Trump administration will begin garnishing wages of student loan borrowers in default starting in early 2026, with initial notices going out the week of January 7.
- About 5.3 million borrowers are currently in default, meaning they are at least 270 days behind on federal student loan payments.
- The Education Department can legally withhold up to 15% of a borrower’s after-tax wages and has already resumed seizing tax refunds and Social Security benefits.
- Borrower advocates warn the move could deepen financial hardship as many families already struggle with rising costs and limited access to affordable repayment plans.
Trump Administration Ends Pandemic-Era Leniency on Student Loans
The Trump administration said Tuesday it will begin garnishing the wages of student loan borrowers who are in default starting early next year, marking a sharp escalation in federal collection efforts after years of pandemic-era leniency. The Education Department said it will begin by sending notices to roughly 1,000 borrowers during the week of January 7, 2026, with notices expanding to larger groups each month. Federal law requires the department to provide at least 30 days’ notice before wage garnishment can begin.
Millions of borrowers are currently considered in default, meaning they are at least 270 days behind on their student loan payments. The department said it will move forward with collections only after borrowers have been given notice and an opportunity to repay their loans or make alternative arrangements.
The renewed enforcement follows the administration’s decision in May to formally end the pause on student loan collections that had been in place since the start of the COVID-19 pandemic in 2020. While payments technically resumed in October 2023, the Biden administration extended a one-year grace period during which borrowers were shielded from the most severe penalties. Until earlier this year, no federal student loans, including those already in default, had been referred for collection since March 2020.
In addition to wage garnishment, the Trump administration has already resumed collecting defaulted student loan debt by seizing tax refunds and other federal payments. According to the latest Education Department data, about 5.3 million borrowers had gone at least 360 days without making a payment as of June 30. Many of them were already in default before collections were halted during the pandemic.
Borrower advocates sharply criticized the decision. Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center and Protect Borrowers, said the administration has failed to adequately help borrowers access affordable repayment options. She called the move to garnish wages “cruel, unnecessary, and irresponsible” at a time when families are struggling with stagnant wages and rising costs for necessities like food, housing, and healthcare.
Yu also warned that the Education Department is ill-prepared to manage large-scale collections, pointing to nearly a million unprocessed Income-Driven Repayment applications and prior instances during the first Trump administration when wages were improperly garnished at the height of the pandemic. Turning wage garnishment back on, she said, is reckless when the department has demonstrated it cannot reliably turn the tool off.
The resumption of wage garnishment comes as the administration continues to dismantle student debt relief efforts put in place under former President Joe Biden. Courts blocked Biden’s attempts at broad loan forgiveness, and earlier this month the Trump administration moved to effectively end the Saving on a Valuable Education, or SAVE, plan. The decision is expected to significantly increase monthly payments for millions of borrowers who had enrolled in the program.
Under federal law, the Education Department can garnish up to 15% of a borrower’s after-tax wages without a court order. It can also seize Social Security benefits and tax refunds, including credits aimed at low-income households. Advocacy groups such as the Debt Collective have called attention to what they describe as the irony of a billionaire-led department aggressively collecting from struggling borrowers, while downplaying alternative options that could help people exit default without financial devastation.
As borrowers brace for renewed enforcement, advocates warn of a looming “default cliff,” with many forced to choose between staying current on their student loans and paying for basic needs. A recent survey by Data for Progress found that more than 40% of borrowers report making such tradeoffs. Experts caution that default carries lasting consequences, including damaged credit, mounting fees, and the loss of income through wage garnishment and benefit seizures, compounding hardship for those least able to absorb it.
