On December 23, 2025, the Department of Education announced it would begin garnishing wages of borrowers in default on their federal student loans. Garnishment notices to the first 1,000 borrowers were scheduled for mailing by January 7, 2026. After this first round of notices, the Department expects to send additional notices to more borrowers in the coming weeks.
If your student loans are in default, you are at risk of having your wages garnished for collection. Your federal student loans generally go into default if you have not made payments for more than 270 days. In an earlier blog post, we discussed wage garnishments and provided tips for borrowers who receive such notices. Unlike most creditors, the government can garnish up to 15 percent of your disposable pay without a court order. Unless you take action, the garnishment will continue until the amount you owe is paid off.
Do not ignore the wage garnishment notice – you must act quickly.
If you receive a wage garnishment notice, do not ignore it. You must take steps immediately after receiving a notice of proposed wage garnishment.
Even if you haven’t received a notice, you should check to see if your loans are in default and if you are at risk of collection actions. If you are not sure whether your loans are in default, you can check your loan status by logging into your studentaid.gov account or by contacting your loan servicer. You can also check your credit report to see if the Department has reported your loan as in default.
If you have received a notice of proposed garnishment, there are steps you can take to object to the garnishment notice and request a hearing, which is typically conducted through a written review of your objections. You must act quickly to avoid a potential garnishment order from being sent to your employer. For more information about this process, see our page on dealing with wage garnishments.
Below are some of the reasons you can raise for objecting to the default:
- Statutory Discharge. If you believe you are eligible for statutory discharge, such as Total and Permanent Disability (TPD) Discharge, Borrower Defense, or Closed School Discharge, you should immediately submit a discharge application and object to the garnishment based on your eligibility for a loan discharge.
- Financial Hardship. You can object to the garnishment based on financial hardship if you believe the garnishment would leave you unable to afford basic life expenses, such as rent, food, and medical costs.
- Recent Employment. If you have recently started employment after being unemployed for at least 12 months due to an involuntary separation of employment, you can object to the garnishment notice.
Protect your wages by taking steps to get your loans out of default.
Don’t wait for a garnishment notice to take steps to protect your wages. There are actions you can take now to get your loans out of default and avoid wage garnishment and other collection actions.
If you are in default, you can take steps now to get your loans out of default through loan loan rehabilitation or consolidation.
Under a loan rehabilitation, borrowers agree to make nine consecutive, on-time monthly payments based on their income. Once nine payments are made, the loans will be returned to good standing and removed from default. If you submit a rehabilitation application within 30 days of receiving a wage garnishment notice and you make the first payment within that timeframe, you will not be subject to garnishment. If you apply for rehabilitation after the Department has already started garnishing your wages, the garnishment will stop after the fifth monthly payment is made in accordance with the rehabilitation agreement.
Under a consolidation, you can combine multiple loans or convert one of your federal student loans into a new Direct Consolidation loan. If you are eligible for consolidation, the new consolidated loan will pay off your defaulted loans, bringing your loan current and out of default. You must act quickly to consolidate, because a borrower cannot use consolidation to get out of default if a garnishment order is in place.
Note: Wage garnishment is just one of many tools the federal government can use to collect on your defaulted student loans. The government can also seize your tax refunds, offset your federal benefits, and even in some cases sue you. If your loans are in default, don’t wait to act. Protect your money from being seized by taking steps to get out of default. Once you are back in good standing, you may be able to lower your monthly student loan payments by applying for an income-driven repayment plan.
Have you received a wage garnishment notice? Share your story with NCLC.
The Department of Education is garnishing wages to collect on defaulted federal student loans for the first time in over five years. We anticipate changes to the process, but the Department has not released many details about it. If you have received a notice of proposed wage garnishment, share your experience with NCLC, so that we can better understand what is happening and advocate for changes to the system. You can share your story here.
