It had to happen at some point.
Millions of Americans with unpaid student loans could soon feel new financial pressure as the Department of Education prepares to restart wage garnishment for borrowers in default.
Beginning in January, the federal government will resume collection efforts on defaulted federal student loans—ending a pandemic-era pause that has been in place since 2020. The policy applies to borrowers who have failed to make payments for an extended period and have not entered repayment or relief programs.
The Trump administration first announced plans to restart collections in May, citing long-standing federal law and growing concerns over ballooning student loan debt.
What Wage Garnishment Means for Borrowers
Under federal rules, wage garnishment allows the government to order employers to withhold up to 15 percent of a worker’s disposable income to repay delinquent student loans. In some cases, federal benefits—including tax refunds and Social Security payments—may also be affected.
According to a Department of Education spokesperson speaking with Fox News Digital, the first notices will be sent to roughly 1,000 borrowers during the first week of January, with enforcement expanding month by month.
Officials stressed that borrowers are given advance notice and opportunities to resolve their debt before any money is withheld.
“These collections are required by law and conducted only after borrowers receive sufficient warning and repayment options,” the spokesperson said.
The authority for these actions comes from federal statutes such as the Higher Education Act of 1965 and the Debt Collection Improvement Act of 1996, which mandate repayment enforcement for delinquent federal debts.
Democrats Push Back Against Enforcement
The move has drawn criticism from Democrats in Congress. Rep. Ayanna Pressley, along with Sens. Elizabeth Warren and Cory Booker, introduced legislation that would block the Department of Education from garnishing wages or federal benefits.
Democratic lawmakers argue that restarting collections places added strain on financially vulnerable Americans. Supporters of enforcement counter that continued delays shift the burden to taxpayers and undermine fiscal responsibility.
A $1.6 Trillion Problem
As of May, federal officials estimated that approximately 43 million Americans hold federal student loan debt, totaling more than $1.6 trillion nationwide. The issue has become one of the largest financial challenges facing the federal government.
President Donald Trump has repeatedly argued that the current system is unsustainable. He has proposed restructuring—or even eliminating—the Department of Education and shifting oversight of student loans to agencies such as the Department of the Treasury.
Supporters say such a move could reduce bureaucracy and improve accountability, while critics warn it would significantly reshape federal education policy.
For now, borrowers in default are being urged to review their loan status and repayment options before enforcement resumes in the new year.
