The Trump administration announced on December 23, 2025, that it will begin garnishing the wages of student loan borrowers in default starting in early January 2026, signaling a major resumption of federal collection efforts after a period of leniency. This move affects millions of borrowers and has drawn criticism from consumer advocates who argue it will exacerbate financial hardships for struggling families.
According to the Department of Education, the first notices will be sent to approximately 1,000 defaulted borrowers the week of January 7, with the number of garnishment orders increasing on a monthly basis. The process, known as administrative wage garnishment, allows the agency to order non-federal employers to withhold a portion of an employee’s income to repay defaulted student loans. Borrowers are considered in default after being 270 days past due on payments, and the department must provide 30 days’ notice before wages can be garnished. This step follows the administration’s earlier decision to end the pandemic-era pause on student loan collections, which had been in place since March 2020.
The Biden administration had extended grace periods and attempted broad loan forgiveness, but those efforts were halted by courts, leading to the current policy shift under President Trump. In May, the Trump administration resumed collecting defaulted debt through methods like withholding tax refunds, and now wage garnishment adds another layer to enforcement. Data from April indicates that over 5 million borrowers are in default, with nearly 4 million more delinquent, highlighting the scale of the issue. The resumption of collections ends a period where no federal student loans had been referred for collection, providing temporary relief that is now being rolled back.
Critics, including Persis Yu, deputy executive director of the Student Borrower Protection Center, have condemned the decision as “cruel, unnecessary, and irresponsible.” Yu emphasized that at a time of stagnant wages and affordability crises, the administration should focus on helping borrowers find affordable payment options rather than seizing wages. The criticism echoes concerns from other advocacy groups who warn that wage garnishment could push vulnerable borrowers deeper into financial distress, especially as inflation and economic pressures persist.
Beyond wage garnishment, the Trump administration has implemented other changes to student loan policies. Earlier this year, the administration passed the “One Big Beautiful Bill Act,” which caps federal student loans for graduate school and limits parental borrowing, while also eliminating certain deferments and reducing repayment options. Additionally, in December, the administration announced an agreement to end the SAVE plan, a Biden-era income-driven repayment plan that affected nearly 8 million borrowers, pending court approval.
For borrowers in default, the consequences are severe: they lose access to deferment or forbearance, which allow temporary pauses in payments, and can no longer choose a repayment plan. The Education Department has urged affected borrowers to contact the Default Resolution Group to explore options, including potential loan discharge through bankruptcy under strict criteria. However, navigating these processes can be complex, and advocates argue that more support is needed to prevent defaults in the first place.
The move to garnish wages is likely to face legal and political challenges, as debates over student debt reform continue. With millions of borrowers at risk, the policy shift underscores broader tensions between debt relief and fiscal responsibility in federal education financing. As the January rollout approaches, stakeholders are watching closely to see how the implementation unfolds and what impact it will have on borrowers’ financial stability.
In summary, the Trump administration’s decision to resume wage garnishment for defaulted student loans marks a significant policy change with wide-reaching implications, driven by a return to pre-pandemic enforcement strategies amid ongoing economic challenges.
