What student loan wage garnishment in 2026 means for borrowers—and why default risks remain higher for Latino families
The U.S. Department of Education has confirmed that it will begin garnishing the wages of federal student loan borrowers in default starting the week of January 7, 2026, marking a major escalation in student loan collections after years of pandemic-era relief.
According to an email sent by the department, the first round of notices will reach approximately 1,000 borrowers during the first full week of January. Officials say that number will increase each month as the agency scales up enforcement. Once a borrower receives notice, wage garnishment can begin as soon as 30 days later.
The department said collection actions will only occur after borrowers are given advance notice and an opportunity to respond or make payment arrangements.
What Wage Garnishment Means for Borrowers
Under federal law, defaulting on a federal student loan gives the government unusually broad powers. The loan holder—often the Department of Education itself—can order an employer to withhold up to 15% of a borrower’s disposable pay, without first going to court.
The policy is administered through Federal Student Aid (FSA), an office within the Education Department, and applies only to borrowers whose loans are officially in default.
Borrowers are entitled to a formal notice that explains:
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The intent to garnish wages within 30 days
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The total amount of debt owed
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The right to review and copy loan records
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The right to object and request a hearing
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Options to avoid garnishment through repayment agreements
Federal student loan collections were paused in early 2020 as part of emergency measures during the COVID-19 pandemic. That pause shielded millions of borrowers from wage garnishment, tax refund seizures, and benefit offsets during a period of economic instability.
The Department of Education resumed collections on defaulted loans in May, and the January 2026 garnishment schedule represents the most consequential step yet in restoring full enforcement.
Consumer advocates warn the timing is especially risky, as many borrowers remain financially vulnerable following inflation, housing costs, and uneven wage growth.
Borrower Advocates Call the Policy Harmful
Persis Yu, deputy executive director and managing counsel at Protect Borrowers, criticized the decision sharply, calling it “cruel, unnecessary, and irresponsible.”
In a statement, Yu argued that the administration is prioritizing aggressive collections over sustainable repayment solutions, particularly as many borrowers struggle to reenter repayment systems after years of disruption.
Advocacy groups note that borrowers in default are often those with lower balances, incomplete degrees, or unstable employment—factors that make wage garnishment especially destabilizing.
Latino borrowers are overrepresented among those who default on federal student loans, according to long-standing federal and academic research. Contributing factors include lower household wealth, higher likelihood of first-generation college attendance, and concentration in sectors with variable income.
What Borrowers Can Do Now
Borrowers unsure of their loan status can check directly through the Federal Student Aid website.
Options vary depending on where a borrower stands:
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Not yet in default: Income-Driven Repayment (IDR) plans may help prevent default.
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Already in default: Loan rehabilitation or consolidation can restore loans to good standing. get out of deafault
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Received a garnishment notice: Borrowers can request a hearing to argue financial hardship and seek a reduction in the amount withheld.
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Potential discharge eligibility: Some borrowers may qualify for discharge due to disability, school misconduct, or other conditions.
Borrowers having difficulty navigating the process can also contact their Members of Congress to request constituent casework assistance. Consumer advocates say congressional offices can often intervene to clarify status or delay enforcement. protectborrowers.org/caseworktool.
Wage garnishment is one of the most severe tools in the federal student loan system—legal, efficient, and deeply disruptive. Its return in January 2026 signals a shift away from pandemic-era flexibility and toward strict enforcement, even as millions of borrowers remain financially exposed.
For Latino communities already facing higher default risks, the policy underscores the importance of early action, accurate information, and access to repayment alternatives before enforcement begins.
Editorial note: This report is based on direct statements from the U.S. Department of Education, Federal Student Aid guidance, and consumer advocacy analysis. Borrowers should seek individualized advice for their specific situation.
Student Loans in Default Will be Sent for Collection. Here’s What to Know for Borrowers
