Trump Administration Is Coming for Paychecks as Student Loan Garnishments Restart in January

The U.S. Department of Education under Donald Trump will resume wage garnishment for federal student loan borrowers who are in default beginning in early January 2026, restarting a collection tool that had been largely paused since the pandemic. Notices will go out to roughly 1,000 borrowers during the week of January 7, with the number of people targeted increasing each month thereafter, the department confirmed, The Washington Post reports.

Federal wages can be garnished only after borrowers receive formal notice and an opportunity to address their debt, either by repaying the amount owed, entering a repayment plan, or disputing the default status. Under current rules, up to 15 percent of a borrower’s disposable after-tax income can be withheld and applied to their outstanding student loan debt.

This action follows the end of pandemic-era relief policies that halted most default collections beginning in March 2020. After years of moratoriums and a subsequent “on-ramp” period, the Education Department resumed some default collections in May 2025, including intercepting tax refunds and certain federal benefits for borrowers in default. Wage garnishment had not been implemented at that time but was delayed and set to begin next year.

According to the department’s most recent figures, more than five million federal borrowers are currently in default, meaning they have failed to make payments for more than 270 days. Those in default face multiple collection tools, including garnishment, until their loans are brought out of default or otherwise resolved.

The move represents a significant shift from policies under the prior administration that extended relief and paused many enforcement actions. The Education Department has framed the resumption of wage garnishment as part of efforts to restore normal loan repayment and collection practices after years of suspension.