The Trump (R) Administration will begin to Garnish the Pay of Student Loan Borrowers in January 2025, the Department of Education (DOE) said Tuesday, Stepping-Up a Repayment Enforcement Effort that Began this year.
Beginning the week of Jan. 7th, 2026, roughly 1,000 Borrowers who are in Default will receive Notices informing them of their Status. That Number of Notices will increase on a Monthly Basis. The Collection Activities are conducted Only After Student and Parent Borrowers have been provided Sufficient Notice and Oportunity to Repay their Loan.
The email does Not contain any Details about the Nature of the Garnishment, such as how much would be Deducted from Wages, but according to the Government’s Student Aid website, up to 15% of an Employee’s Pay after other Deductions can be Garnished for Defaulted Borrowers. A Borrower should be sent a Notice of the Government’s intent 30 days before the Seizure begins, according to the website, studentaid.gov.
The Trump Administration Rnded a Five-year Reprieve on Student Loan Repayments in May, 2025, with Forced Collections on Federal Student Loans in Default, which meant Tax Refunds and other Federal Payments could be Withheld and Applied toward Debt Payments. That move signaled the End of Pandemic-era Relief, that began with Pauses on Payments in March 2020.
After several Extensions by the Biden (D) Administration, Payments Resumed in October 2023, but Borrowers weren’t Penalized for Defaulting until 2024. About Five Million Borrowers are in Default, and Millions more are expected to be Close to Missing Payments.
The Government had Signaled earlier this year, that it would Send Notices that would Lead to a Portion of a Borrower’s Paycheck being Garnished. Being in Ccollections and in Default can Damage Credit Scores.
"Wage Garnishments were Used by the Government before the Pandemic Pause" said Betsy Mayotte, President of the Institute of Student Loan Advisors, which provides Free Advice for Borrowers. But the 2020 Collections Pause was the First She was aware of, She said, and that may make the Deductions more Shocking for People who have Not had to Pay for years.
“There’s a lot of defaulted borrowers that think that there was a mistake made somewhere along the line, or the Department of Education forgot about them,” Ms. Mayotte said. “I think this is going to catch a lot of them off guard.”
The First Day after a Missed Payment, a Loan becomes Delinquent. After a certain amount of Time in Delinquency, the Loan is considered in Default, the Kind of Loan determines the Ttime Period.
If Someone Defaults on a Federal Student Loan, the Entire Balance becomes Due immediately. Then the Loan Holder can begin Collections, including on Wges.
But there are Options to Reorganize the Defaulted Loans, including Consolidation or Rehabilitation, which requires making a certain Number of Consecutive Payments determined by the Loan Holder.
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