Trump Admin to Garnish Wages of Defaulted Student Loan Borrowers

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The Trump administration is set to start garnishing wages from student loan borrowers in default, with the first notices expected to go out on January 7, 2026. This move targets around 5 million Americans who have defaulted on their student loan payments, meaning they’ve not paid for at least 270 days.

Borrowers will receive a 30-day written notice outlining the impending garnishment and their right to request a hearing. Up to 15% of disposable earnings can be withheld, with exemptions for basic living expenses, dependents, medical expenses, and public assistance.

Wage garnishment can lower credit scores by 30-50 points and will continue until the debt is repaid, settled, or forgiven. Borrowers can explore options like Income-Driven Repayment plans, loan rehabilitation, or consolidation to mitigate the impact.

Borrowers can check their loan status and enroll in Income-Driven Repayment plans. They can also apply for deferment or forbearance and contact loan servicers for repayment agreements or hardship assistance.

Borrowers can contest garnishment within 30 days and appeal to the DOE’s Office of Borrower Defense. The CFPB ensures compliance with the Fair Debt Collection Practices Act.

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