"As if student loan borrowers didn't have enough to worry about, some who fell into default during the pandemic-era payment pause are now seeing a long-dreaded consequence hit their paychecks: Federal wage garnishment has officially restarted for the first time in roughly five years. The move could affect millions of Americans already struggling with higher prices, stagnant wages, and the weak job market for college grads."
"The Trump administration's Education Department has begun sending garnishment notices to defaulted federal student loan borrowers, with the first wave going out this week. Officials say the action follows the end of the pandemic collections pause and will ramp up this year as more defaulted accounts are moved into enforced collections. This marks the next stage of the post-pandemic student loan reset, following the resumption of payments in late 2023 and the gradual restart of tax refund seizures and other offsets in 2025."
Federal wage garnishment for defaulted federal student loans has resumed after the pandemic-era collections pause, potentially reducing borrowers' take-home pay by up to 15% of after-tax income. The Education Department has begun sending garnishment notices, with collections expected to ramp up this year as more defaulted accounts move into enforced collections. Default status is reached after at least 270 days without a required payment. Approximately 5.3 million borrowers are in default and likely to receive notices. The resumption of garnishments follows the restart of payments in late 2023 and the gradual return of other collection actions into 2025.
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