Student loan defaults trigger paycheck garnishment starting next month

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The Department of Education will begin garnishing wages of those with defaulted federal student loans starting in January.

The Trump administration announced in May that it would resume collections on defaulted federal student loans — including wage garnishments and seizure of Social Security benefits — for the first time since 2020. In March 2020 at the onset of the COVID-19 pandemic, the government paused referring federal student loans to collections.

Now, the Trump administration has said that it will introduce garnishing wages in early January after providing student and parent borrowers ample heads up to repay their debts. Garnishing wages means that the U.S. government is authorized to order employers to withhold up to 15% of their employees' wages after taxes, which would contribute toward paying off their student loans.

"We expect the first notices to be sent to approximately 1,000 defaulted borrowers the week of January 7, and the notices will increase in scale on a month-to-month basis," a Department of Education spokesperson told Fox News Digital. "All (Federal Student Aid) collections activities are required under the Higher Education Act of 1965 and Debt Collection Improvement Act of 1996 and conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans."

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