The Economic Times News

Student loan wage garnishment returns in 2026 under Trump what borrowers must know now

The Trump administration plans to restart federal student loan wage garnishment for defaulted borrowers in early 2026. Notices will go out to about 1,000 borrowers the week of January 7. The rollout expands monthly, potentially reaching millions amid a $1.7 trillion federal student loan debt crisis affecting 42.7 million Americans. Default hits after 270 days of missed payments. Up to 15% of disposable pay can then be withheld by employers, without court approval. This ends a pandemic-era pause that shielded borrowers since March 2020.