Education Dept. Delays Federal Student Loan Collections
The U.S. Department of Education began resuming wage garnishment of defaulted student loans in January 2024, following a three-year pause initiated during the COVID-19 pandemic. Initial notices were sent to approximately 1,000 borrowers the week of January 7, 2024.
U.S. Department of Education and Student Loan Default
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The U.S. Department of Education is responsible for managing the federal student aid programs, including those related to loan defaults and collections. Wage garnishment is one method the Department uses to collect on defaulted federal student loans.
History of the Garnishment Pause
Wage garnishment, along wiht other collection actions, was paused in March 2020 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provided broad student loan relief measures, including a temporary suspension of loan payments and a 0% interest rate.
This pause was repeatedly extended until the Supreme Court blocked the Biden administration’s student loan forgiveness plan in June 2023. Biden v. Nebraska effectively ended the widespread loan forgiveness initiative and prompted the Department of Education to resume normal collection activities.
Resumption of Wage Garnishment
Wage garnishment involves the legal process of withholding a portion of a borrower’s earnings to repay their defaulted student loan. The Department of Education resumed this practice in January 2024, targeting borrowers who had previously defaulted on their federal student loans.
Notification Process and Borrower Rights
Borrowers subject to wage garnishment receive official notices from the Department of Education outlining the amount to be garnished and their rights. Borrowers have the right to dispute the garnishment order and explore options to resolve their default, such as entering a rehabilitation agreement or consolidating their loans.Details on defaulted loan options is available on the Federal Student Aid website.
According to a statement from the Department of Education, the first notices were sent to approximately 1,000 defaulted borrowers during the week of January 7, 2024. CNBC reported on this initial wave of notifications, citing the Department’s plans.
Impact and Current Status (as of January 18, 2026)
as of January 18, 2026, the department of Education continues to resume wage garnishment for defaulted student loan borrowers. The Department has implemented a “fresh start” initiative, offering borrowers a pathway to get out of default and back into good standing. The “fresh start” initiative provides temporary relief and streamlined options for borrowers.
Recent data from the Education Department shows that approximately 4.0 million borrowers are in default as of late 2023. Federal Student Aid data on default rates provides detailed statistics on student loan defaults.
Ther have been no significant legal challenges or policy changes impacting the resumption of wage garnishment as of January 18, 2026.The Department of Education continues to encourage borrowers to contact their loan servicer to explore available options.