Wage Garnishment for Student Loans to Resume in January 2026

Starting in January 2026, the U.S. government will begin taking money directly out of paychecks for some people who have not been making payments on their federal student loans.

This process is called "wage garnishment." It applies to borrowers whose student loans are at least 270 days overdue, also known as being “in default.”

During the COVID-19 pandemic, the government placed a hold on student loan collections to help people. As these protections end, the Department of Education is bringing back normal collections, including wage garnishment.
 

How Wage Garnishment Works

Under federal regulations, if you are in default on your student loans, the government can take up to 15% of your income (after taxes) straight from your paycheck.

However, there are rules to make sure you still have enough money for basic living expenses.
 

Who Will Be Affected?

The first group to be affected will be about 1,000 borrowers. They will start receiving warning notices during the week of January 7, 2026. This is just the beginning—every month, more people will be notified. Over time, millions of borrowers could be impacted.

Estimates show that about 5.3 million Americans are currently in default on their federal student loans and may be at risk of wage garnishment if they don’t take action.
 

What Happens Next?

If you are at risk, you will receive a written notice at least 30 days before any money is taken from your paycheck. This notice gives you a chance to:
 

• Work out a repayment plan
• Settle your loan through consolidation or rehabilitation programs
• Request a hearing if you think the garnishment would cause you serious financial hardship

 

Why Is This Happening Now?

The pause on collections was meant to help people during the pandemic. Now that those programs are ending, the government is returning to its regular ways of collecting past-due student loans.
 

In Summary:

While only about 1,000 people will get garnishment notices in January 2026, many more will likely receive them throughout the year. Millions of student loan borrowers are at risk unless they take steps to get out of default.

If you are concerned, check your loan status and contact your loan servicer for help.

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