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4d ago

Education Department to Resume Wage Garnishment for Defaulted Student Loans Jan. 7

The administration says resuming collections protects taxpayers from unpaid federal loans.

Campus life at Texas Southern University. Millions of Americans with severe student loan debt could have their wages garnished in the new year. 
People walk across the University of Houston campus near the UH Student Center in Houston, Monday, Oct. 27, 2025. Millions of Americans with severe student loan debt could have their wages garnished in the new year. 
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Overview

  • The department plans to send about 1,000 administrative wage-garnishment notices the week of Jan. 7, with additional batches to follow in the months ahead.
  • Federal law permits garnishment of up to 15% of a borrower’s disposable pay without a court order, and disposable pay can include salary, overtime, bonuses, commissions, sick leave and vacation pay.
  • Borrowers receive a 30-day window to respond before employers are ordered to withhold wages, and employers can face fines if they fail to comply.
  • Many borrowers may not see required notices because of outdated contact information, increasing the risk of automatic paycheck seizures unless they act quickly.
  • Protections for low-wage workers are limited to $217.50 per week, and options to avoid garnishment are constrained to rehabilitation or consolidation as income-driven plans generally are unavailable while in default after rollbacks to SAVE.