Overview
- Administrative Wage Garnishment and Treasury Offset actions for defaulted federal student loans are paused with no announced end date.
- Education Secretary Linda McMahon said collections will resume "sooner rather than later," contingent on getting new payment options in place.
- Officials tie the pause to rolling out the One Big Beautiful Bill’s repayment overhaul, including a second chance at rehabilitation and preparation for the Repayment Assistance Plan slated to begin in mid-2026.
- The reversal comes weeks after notices went out to roughly 1,000 borrowers to begin wage garnishment in early January following a 2025 restart of collections.
- Borrower advocates praised the reprieve, while taxpayer and free-market groups criticized the move and pointed to the secretary’s legal discretion under the Higher Education Act.