Overview
- About 1,000 defaulted borrowers will receive administrative wage‑garnishment notices the week of January 7, with the volume of notices set to increase monthly.
- Wage withholding can begin after a required 30‑day notice period, and the government may take up to 15% of a borrower’s after‑tax pay under federal rules.
- Borrowers enter default after roughly 270 days without payment, and more than 5 million are already in default with millions more delinquent.
- Officials say collections proceed only after borrowers are given sufficient notice and a chance to repay, while advocacy groups call the move cruel and unnecessary.
- The restart follows the May 2025 reactivation of the Treasury Offset Program and broader policy changes, including phasing out the SAVE plan and reducing repayment options under the One Big, Beautiful Bill Act.