The Education Department under Trump is restarting wage garnishment for defaulted student loans. That kicks off in January 2026. The first batch of scary letters hits about a thousand people right after the new year, with more added each month. They can take up to fifteen percent of what a borrower makes after taxes. This applies to federal student debt where the borrower is in default, which means they have missed payments for around nine months. Over five million people are currently in that nasty default category.
This whole garnishment thing had been frozen since the pandemic started. They slowly began other collections earlier, like seizing tax refunds. The new move is basically a return to the old, harsh way of doing business. Borrowers get a warning and a chance to sort things out before the government starts taking money directly from their paychecks. Options to avoid it include setting up a payment plan or disputing the default status.
The department says this is just a return to normal after all the pauses and the so-called on-ramp period. It is a major policy shift from the previous administration's more forgiving vibe. For anyone in default, the tools are all back on the table now until they resolve their loan situation.
This whole garnishment thing had been frozen since the pandemic started. They slowly began other collections earlier, like seizing tax refunds. The new move is basically a return to the old, harsh way of doing business. Borrowers get a warning and a chance to sort things out before the government starts taking money directly from their paychecks. Options to avoid it include setting up a payment plan or disputing the default status.
The department says this is just a return to normal after all the pauses and the so-called on-ramp period. It is a major policy shift from the previous administration's more forgiving vibe. For anyone in default, the tools are all back on the table now until they resolve their loan situation.
