Trump Administration to Begin Wage Garnishments for Defaulted Student Borrowers in January

The Trump administration will begin garnishing wages from federal student loan borrowers who are in default starting in early January, federal officials said. The initiative targets borrowers who have not resolved defaults on federal student loans and represents a stepped-up phase of collection activity by the U.S. Department of Education.

Federal wage garnishment for defaulted student loans is an administrative procedure that authorizes the Education Department to divert a portion of a borrower’s paycheck toward outstanding federal debt. This enforcement mechanism applies to federal loans that have entered default; private student loans follow different collection rules. The department’s action will apply to borrowers whose loans meet the federal definition of default.

Borrowers typically fall into default after a prolonged period of missed payments. Once in default, individuals may face detriments such as harmed credit scores, added collection fees, and collection actions including wage garnishment, tax refund offsets and administrative reductions of federal benefit payments. Officials indicated borrowers would receive notices detailing the impending garnishments and describing available options to contest or halt the action.

There are multiple ways to stop or prevent wage garnishment. Common remedies include rehabilitating a defaulted loan, consolidating eligible federal loans into a new loan, enrolling in an income-driven repayment plan if qualified, or negotiating a repayment arrangement with a loan servicer. Borrowers are advised to contact their servicer or the Department of Education’s borrower services promptly to review eligibility and next steps.

Federal garnishment actions are subject to statutory procedures and consumer protections; borrowers have opportunities to dispute claims and request administrative reviews. Employers receiving garnishment orders are generally required to withhold the instructed amount from employee paychecks and remit it to the government.

Policy analysts warn that restarting garnishments could strain household finances for borrowers already managing tight budgets. Advocacy groups have urged the department to provide clear communication and accessible relief pathways for borrowers who may qualify for rehabilitation or other repayment assistance.

For more information, affected borrowers should consult the U.S. Department of Education’s official guidance, contact their loan servicer, or seek help from legal aid organizations and nonprofit student-loan counselors to understand rights and repayment options.