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Americans with defaulted student loans are preparing for potential wage losses as federal debt collection resumes. Beginning January 7th, the US Department of Education will restart wage garnishment for borrowers who have fallen far behind on federal student loan payments. The program was originally scheduled to restart in mid-2025 but faced months of delays after being dormant for nearly five years. Federal data shows that around 5.3 million borrowers had not made a student loan payment for at least 360 days, placing them in default. The Department of Education confirmed it will begin issuing wage-withholding notices this month and will continue sending new notices every month throughout 2026.*
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