Starting early next year, the federal government is dusting off a long-dormant tool to crack down on defaulted student loans.
The Trump administration’s Department of Education will resume wage garnishment for borrowers in default as of early January 2026, marking the end of a collections pause that’s been in place since March 2020 amid the pandemic.
For taxpayers footing the bill, this is a double-edged sword: while it’s a step toward accountability, the timing couldn’t be worse for struggling households already buried under high delinquency rates, with a staggering $117 billion in defaulted loans held by 5.3 million borrowers as of mid-2025.
The pause on collections since March 2020 gave borrowers a breather, but that reprieve is over, and the Department of Education means business.
Come the week of Jan. 7, 2026, roughly 1,000 borrowers will get the first wave of default notices, with more to follow each month.
Borrowers will have just 30 days after notification to challenge the action, pay up, or arrange a deal to dodge the garnishment hammer—a tight window that might leave many scrambling.
Under federal law, the government can seize up to 15% of a borrower’s disposable income through administrative wage garnishment until the debt is cleared or resolved.
That’s a significant chunk of a paycheck, especially for working families already stretched thin by inflation and the fallout of post-pandemic economic policies.
Education officials argue this move restores accountability and protects taxpayers from bearing the burden of unpaid loans, a stance that resonates with those tired of footing the bill for progressive lending experiments.
Delinquency and default rates have soared since the end of pandemic protections and a 12-month repayment “grace” period that concluded on Sept. 30, 2025.
Missed payments are piling up, and borrower advocates warn that restarting enforcement now could push already struggling households over the financial edge.
While their concern for borrowers carries weight, let’s not forget that endless leniency often rewards irresponsibility at the expense of those who play by the rules.
Adding fuel to the fire, the Education Department recently proposed a settlement in December 2025 to scrap the Biden-era SAVE income-driven repayment plan, pending court approval, shifting enrolled borrowers to other programs.
This shake-up, paired with renewed collections, has advocates fretting over increased financial strain, though one wonders if the real issue is the expectation of perpetual handouts rather than personal accountability.
For everyday Americans watching their tax dollars vanish into bloated federal programs, this return to enforcement might just be the wake-up call needed to rein in a system that’s long favored debt forgiveness over fiscal responsibility.
