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1h ago

Education Department Pauses Planned Wage Garnishments for Defaulted Student Loans

The agency says the delay gives time to implement repayment changes under the One Big Beautiful Bill, including a Repayment Assistance Plan set for July 1, 2026.

Education Secretary Linda McMahon speaks to the crowd as protesters gather outside the Supreme Court as it hears arguments over state laws barring transgender girls and women from playing on school athletic teams, Tuesday, Jan. 13, 2026, in Washington. (AP Photo/Jose Luis Magana)
FILE - Education Secretary Linda McMahon speaks with reporters in the James Brady Press Briefing Room at the White House, Thursday, Nov. 20, 2025, in Washington. (AP Photo/Alex Brandon, File)
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Overview

  • Education Secretary Linda McMahon said this week that wage garnishments for defaulted borrowers are on hold.
  • In a Friday statement, the department linked the pause to rolling out new repayment policies, and it did not provide a restart date.
  • Initial notices began the week of Jan. 7 to about 1,000 borrowers with plans to scale monthly, describing potential cuts of up to 15% of pay.
  • Borrowers who received January notices had expected deductions in early February, but the timing is now unclear.
  • Collections resumed in early 2025, including tax-refund offsets in May, with about $500 million recovered and roughly 9 million borrowers reported in default.