Archive · 24 Dec 2025
US to Cut Wages for Defaulted Student Loans
The US government will start taking money directly from the paychecks of people who haven't paid their federal student loans for a long time.
This is called wage garnishment.
It starts in January 2024 and will affect about 1,000 borrowers at first, with more notices sent out each month.
The government can take up to 15% of a person's wages.
This is happening because the break on student loan collections that started during the COVID-19 pandemic is over.
Right now, about 5.5 million people are in default, and many more are behind on their payments.
The government has to send a warning notice 30 days before taking money from paychecks.
The US Department of Education will begin wage garnishment for defaulted federal student loans starting January 7, 2024.
Around 1,000 borrowers will receive notices initially, with more sent out monthly.
The government can take up to 15% of a borrower's wages after a 30-day warning notice.
About 5.5 million borrowers are currently in default, with millions more behind on payments.
Full wage garnishment will resume in early 2026 after a pause during the pandemic.
- Who
- Federal student loan borrowers in default
- What
- Wage garnishment for unpaid federal student loans
- When
- Starting January 7, 2024, with full resumption in early 2026
- Where
- United States
- Why
- To collect unpaid student loans after the end of pandemic relief
- Start Date
- January 7, 2024
- Number of Borrowers in Default
- 5.5 million
- Borrowers Over 270 Days Late
- 3.7 million
- Borrowers in Early Delinquency
- 2.7 million
- Maximum Wage Garnishment
- 15%
- Warning Notice Period
- 30 days
- Full Wage Garnishment Resumption
- Early 2026