Starting January 7, 2026, students who have unpaid loan debts in the United States may face wage garnishment of up to 15% by the Department of Education (DoED). According to data from the Washington Post, it is expected to affect 1,000 people in debt, but that number is just the beginning of a larger collection campaign.
The same outlet reported statements from DoED spokesperson Ellen Keast, who explained that this is not a new collection method, but one that had been dormant for years. In addition to having to notify the borrower’s employer of the default, the DoED also has to notify the affected individual 30 days in advance before proceeding with garnishment. During this time, the individual can secure other repayment arrangements, pay the outstanding balance, or even contest the garnishment order through a hearing.
Outstanding student loans
After years of being suspended, the collection of debt from students who had outstanding student loan payments has been restarted. This collection will come into effect on January 7, 2026, after being announced this December by the Trump administration. This debt collection method is neither new nor specific to the current administration, as it was implemented by Biden during his grace period. However, it has been on hold since the coronavirus pandemic. According to data from the Washington Post, starting on the mentioned date, notifications will be sent to around 1,000 people, although according to the DoED, “The first 1,000 are also just the beginning, with more notices to be sent to Americans every month after 2026”.
Outstanding debt
According to DoED data from this summer, about 5.3 million people had not made a single payment on their student loans last year, with debts that have been outstanding for more than 6 years. According to an analysis of credit reports by the Urban Institute, around 6 million borrowers were at least 60 days behind on student loan payments as of August 2025. After the Trump administration decided to collect tax refunds and Social Security benefits to cover overdue student loan debt in May, the decision to start with withholdings is now being implemented.
According to statements by DoED spokesperson Ellen Keast to The Washington Post, “Although these forms of collection began months ago, it has taken some time to get the system up and running again after it had been completely halted for several years”. The federal government shutdown also did not help its reactivation.
How does the collection of the outstanding debt begin?
The wage garnishment and withholding from affected individuals go through several stages. First, the employer must be identified and verified, as they are responsible for withholding part of the payment. Before proceeding with garnishment, the DoED is legally required to notify the affected party 30 days in advance. It is during this period that the person can negotiate repayment terms, pay off the outstanding balance, or even challenge the garnishment order, all after attending a hearing. Wage withholdings will continue until the debt is fully paid, or until the borrower takes other measures to resolve the default, with the DoED able to withhold up to 15% of post-tax income.
Fresh Start
Fresh Start was the name given to the wage garnishment initiative launched by the Biden administration during its grace period. Through it, those who had outstanding student debt were allowed to pay it comfortably. Linda McMahon, the current Secretary of the DoED, has criticized this measure of the previous administration, arguing that it was a way to deceive citizens, “The executive branch does not have the constitutional authority to erase debt, nor do loan balances simply disappear”.
Frequently asked questions
When does the garnishment start and how much is it?
January 7, 2026; up to 15% of the net salary can be withheld.
Is there prior notice?
Yes, the Department of Education will notify 30 days in advance to allow for negotiation or payment.
Who does it affect?
People with delinquent student loans; it will start with 1,000 cases and increase monthly.