US Education Department delays plan to garnish wages of student borrowers in default
U.S. Education Secretary Linda McMahon takes in a selection of grade school students’ patriotic artworks and high schoolers’ recent output in a special installation set up at Exeter-West Greenwich Regional Junior High and High School in Rhode Island on Monday, Jan. 12, 2026. (Photo by Alexander Castro/Rhode Island Current)
WASHINGTON — The U.S. Department of Education, for now, is backtracking on plans to garnish wages and seize tax refunds of student loan borrowers in default, the department announced Friday.
Less than a month after the agency said it would begin garnishing wages by sending notices to roughly 1,000 borrowers in default the first full week of January, the department said that the temporary delay would allow it to implement “major student loan repayment reforms” under Republicans’ tax and spending cut bill that President Donald Trump signed into law in 2025.
The delay would “give borrowers more options to repay their loans,” the department said.
It was not immediately clear from the announcement how long the pause would last.
Education Secretary Linda McMahon signaled earlier this week during the Rhode Island portion of her Returning Education to the States Tour that wage garnishment has been “put on pause for a bit.”
The agency resumed collections for defaulted federal student loans in May after a pause that began during the early weeks of the COVID-19 pandemic.
A borrower can have their wages garnished as a consequence of defaulting on their loans, and a loanholder can order an employer to withhold up to 15% of their disposable pay to collect defaulted debt without being taken to court, according to Federal Student Aid, an office of the Education Department.
The delay also applies to the Treasury Offset Program, which “allows the federal government to collect income tax refunds and certain government benefits (for example, Social Security benefits) from individuals who owe debts to the federal government,” per FSA.
Aissa Canchola Bañez, policy director for the advocacy group Protect Borrowers, said in a Friday statement that “after months of pressure and countless horror stories from borrowers, the Trump Administration says it has abandoned plans to snatch working people’s hard-earned money directly from their paychecks and tax refunds simply for falling behind on their student loans.”
“Amidst the growing affordability crisis, the Administration’s plans would have been economically reckless and would have risked pushing nearly 9 million defaulted borrowers even further into debt,” she added, while pointing to a Jan. 7 letter from Protect Borrowers and other organizations calling on McMahon to “immediately halt its plan to resume garnishment of millions of struggling borrowers’ wages.”