Overview
- About 1,000 defaulted borrowers will receive administrative wage-garnishment notices the week of Jan. 7, with notifications set to expand month to month.
- Borrowers must be given at least 30 days’ notice before withholding begins, and up to 15% of disposable pay can be taken; tax refunds and some federal benefits have already been subject to offsets since May.
- More than 5 million borrowers are in default, and the Education Department has warned the total could rise toward roughly 10 million as delinquencies continue.
- The garnishment rollout follows the spring restart of collection activities and comes alongside changes that narrow repayment options and phase out the SAVE plan pending court approval.
- Advocates and some Democrats criticized the move as harmful to vulnerable borrowers, while the department says it is enforcing the law and provides borrowers avenues to contest, rehabilitate, or consolidate defaulted loans.