Starting in early 2026, loan holders can begin garnishing pay — or order the employers of defaulted loan borrowers to withhold up to 15% of their disposable income — so they can collect the defaulted debt payments. The Department of Education confirmed the impending timeline to the Washington Examiner on Tuesday.
“We expect the first notices to be sent to approximately 1,000 defaulted borrowers the week of January 7, and the notices will increase in scale on a month-to-month basis,” an Education Department spokesperson said.
The department’s collection of defaulted payments through garnishment will begin for the first time after a five-year, COVID-19 pandemic-era pause. The Trump administration first warned the repayment requirements would begin again in an April press release. It first restarted the Treasury Offset Program’s collection of student loans in May 2025 and said it would announce the garnishments later.
Federal student loan borrowers cross the default threshold after 270 days of missed payments. The wage garnishment lasts until federal borrowers pay their defaulted loans in full or until they resolve their default status, according to the Federal Student Aid office.
EDUCATION DEPARTMENT RESUMES COLLECTING LOANS FOR 5 MILLION BORROWERS IN DEFAULT
In April, the Education Department said that over 42 million borrowers owed over $1.6 trillion in student debt payments.
“The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear. Hundreds of billions have already been transferred to taxpayers. Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment—both for the sake of their own financial health and our nation’s economic outlook,” Education Secretary Linda McMahon said in April.
