U.S. to Resume Seizing Wages from Student Loan Defaulters

The U.S. Department of Education will restart wage garnishment for certain borrowers in default. This process involves taking money directly from a person's paycheck to repay their federal student loan debt. Starting the week of January 7, 2026, the department will send formal notices about these paycheck deductions. The first wave will target roughly 1,000 individuals. They are part of a larger group of five million federal student loan borrowers currently in default. The action marks a major shift. Wage garnishment was paused for over four years during the pandemic. Officials say this "fresh start" phase is meant to give borrowers time to explore repayment options before deductions begin. Borrowers at risk can avoid garnishment by contacting their loan servicer. Options include entering a repayment plan or requesting a temporary delay due to financial hardship. If no action is taken, the government can legally direct an employer to withhold up to 15% of a borrower's disposable pay.