The Trump administration has declared it will start seizing wages from American student loan borrowers who have fallen into default, with the first actions scheduled for early 2026.
Timeline and Scale of Wage Garnishment
According to a statement released on Tuesday 23 December 2025, the US Department of Education will initiate the process by sending notices to roughly 1,000 borrowers in the week commencing 7 January 2026. Officials plan to escalate the programme each subsequent month, contacting more defaulters.
The law mandates that borrowers receive a 30-day notice before any money can be taken from their pay. The department insists collection will commence "only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans."
End of Pandemic-Era Leniency
This decision marks a definitive end to the period of relief that began in March 2020, during which no federal student loans were referred for collection—even those already in default. The Trump administration restarted the recovery of defaulted debt earlier this year by withholding tax refunds and other federal payments.
Although loan repayments officially resumed in October 2023, the preceding Biden administration had granted a one-year grace period. The Biden administration's attempts to enact broad student loan forgiveness were ultimately blocked by the courts.
A borrower is classified as in default when they are 270 days past due on their payments, a status affecting millions of people across the United States.
Criticism and Borrower Concerns
The move has drawn sharp criticism from debt advocacy groups. Persis Yu, deputy executive director of the Student Borrower Protection Center, condemned the policy as "cruel, unnecessary, and irresponsible."
"At a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration’s decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible," Yu stated.
She further accused the department of failing to adequately help borrowers find affordable repayment plans, stating it was using "its self-inflicted limited resources to seize borrowers’ wages instead of defending borrowers’ right to affordable payments."
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