Overview
- About 1,000 borrowers will receive the first garnishment notices the week of Jan. 7, with larger monthly batches planned thereafter.
- A federal student loan typically enters default after roughly 270 days of nonpayment, enabling administrative garnishment without a court order.
- Borrowers can contest or avoid withholding by requesting a hearing, arranging repayment, completing loan rehabilitation with nine payments in 10 months, or using Direct Consolidation before garnishment begins.
- Government estimates show more than 5 million borrowers in default and several million more seriously delinquent, while advocates warn the policy will strain low- and middle-income households.
- Starting Jan. 1, 2026, most forgiveness under income-driven repayment will be treated as taxable income under recently enacted law, though Public Service Loan Forgiveness remains tax-free.