Wage Garnishments for Defaulted Student Loans to Begin Early Next Year

Core Insights - The Department of Education will begin garnishing wages of defaulted federal student loan borrowers starting January 7, affecting approximately 1,000 borrowers initially [2][9] - The garnishment process is a response to the significant number of borrowers who have defaulted since the end of the COVID-19 payment pause, with 5.2 million borrowers in default as of September 30, 2025 [4][9] Group 1 - The Department of Education has stated that wage garnishments will increase monthly, impacting more borrowers over time [2] - Borrowers who default after not making payments for over 270 days can have up to 15% of their income garnished, with a 30-day period to negotiate repayment terms or request a hearing [3] - The resumption of wage garnishment marks the first time in about five years that defaulted borrowers face such actions, following the COVID-19 pandemic [7] Group 2 - The garnishment of wages is expected to reduce disposable income for borrowers, potentially hindering economic growth and affecting federal revenue [6] - The Department of Education has confirmed that it will not garnish Social Security benefits from defaulted borrowers, continuing the pause on such actions [8] - The initial announcement for resuming collections on defaulted loans was made in May, with the process taking longer than anticipated due to various factors, including a government shutdown [7]