Wage garnishment for federal student loans was poised to resume after years of pandemic-era relief, potentially affecting borrowers in default by taking money directly from their paychecks. But in a recent announcement, the Department of Education said it will delay wage garnishment, giving borrowers more time to explore options and prepare for upcoming changes in the federal student loan system.
What Has Changed?
Instead of moving forward immediately with wage garnishment and other forced collection efforts, the Department of Education will pause these activities while it implements major student loan repayment reforms.
That means you won’t see wage garnishment start right now, even if notices were sent earlier in January. The pause is temporary and designed to let the Department put new repayment options in place that may help more borrowers manage or resolve their debt.
What Is Wage Garnishment?
Wage garnishment allows the federal government to take up to 15% of your disposable income (after required deductions) if your federal student loans are in default. This can happen without a court order, and employers are required to comply.
What You Can Do Now
Here’s what you can do now to avoid garnishment later:
1. Check your loan status
Log in to StudentAid.gov to see if your loans are in default and who services them.
2. Contact your loan servicer
- If you’re not in default: Income-driven repayment (IDR) plans that can lower payments—sometimes to $0
- If you are in default: Loan rehabilitation or consolidation options to get out of default
3. Ask for help if you’re facing hardship
- If garnishment resumes and it would make it hard to pay for basics like rent, food, or childcare, you can request a hardship review.
- Connect with a trusted SaverPerks partner for help:
You’re not failing, the system is complicated
Student loan rules are in flux, and the back and forth has left many people confused. If you’re feeling stressed or overwhelmed, that makes sense. Taking even one small step, checking your status, making a call, or asking questions, can help you regain control.
📖 Nearly a third of SaverLife members have federal student loans. Read how one member is dealing with hers: The Cost of a Degree: Mahiyat on Sacrifice, Side Hustles, and Hope
