• The Trump administration will resume wage garnishments for defaulted student loan borrowers starting January 7.
• Approximately 1,000 borrowers will receive initial notices, with numbers increasing monthly.
• Over 5 million borrowers are currently in default after the pandemic-era pause on collections.
• Impacted borrowers may see up to 15% of their disposable income garnished until their loans are repaid or they exit default.
• The move comes amid broader economic challenges facing many Americans during a potential affordability crisis.

The U.S. Department of Education has confirmed that wage garnishment for student loan borrowers in default will resume starting the week of January 7, 2026. Initially, about 1,000 notifications will be sent, with this number expected to increase on a monthly basis, marking a significant policy shift after a years-long pause due to the COVID-19 pandemic, according to Business Insider, The Hill, and NPR.

The garnishment process applies to borrowers who have not made loan payments for more than 270 days, placing them in official default. The Education Department stated that garnishments can occur only after borrowers are given proper notice and an opportunity to repay their debts, which includes informing them that up to 15% of their disposable income may be withheld, as reported by CBS News and Al Jazeera.

The transition back to active debt collection stems from a substantial backlog of borrowers who fall into default, with 5.5 million counted as currently defaulted, according to a report from the American Enterprise Institute cited by ABC News and India Times.

With the current economic backdrop intensifying pressure on borrowers, many are already struggling with rising living costs. Advocates have voiced concerns regarding the timing of such a policy, arguing it exacerbates an ongoing affordability crisis by further straining already tight household budgets, particularly as federal support remains limited, as echoed in statements by The Hill and NPR.