After a nearly six-year pause, the U.S. Department of Education will again garnish the wages of student loan borrowers who have fallen into default — a move that would see 15% of a paycheck removed.
Notices were said to go out on Jan. 7 to an initial pool of 1,000 people — a number that officials said will increase in the coming months. With over 5 million borrowers currently in default and many more on their way, student loan administrators and advocates have sounded alarms about an impending “default cliff,” or historic default numbers, which they fear garnishment will only worsen.
“Things have never been so chaotic for student loan borrowers,” said Betsy Mayotte, president of The Institute of Student Loan Advice (TISLA).
Mayotte founded TISLA in 2018 on the premise that people deserved free access to expert student loan advice and dispute resolution. She said that since the pandemic started, there have been significant changes to student loans that have been confusing and stressful for borrowers.
And there will be no slowdown in these changes, especially after the passage of President Donald Trump’s “One Big Beautiful Bill Act,” which will see new limits on loans for graduate programs and more take effect this summer.
With people feeling more anxious than ever about loans, Mayotte wants borrowers to be aware of all of their options, especially those who are in or headed toward default. Public Source talked to her and other experts about ways to address and avoid wage garnishment.
Tip: Check loan status immediately
Defaulted loans occur when 270 days have passed without a payment, but a borrower isn’t at risk for garnishment until these loans have moved to the Education Department’s collection unit, which is the Default Resolution Group.
One way to check if this transfer has happened is to log onto a loan servicer’s website and see if a balance is listed, which means it’s active. Another way to check is by logging onto the Federal Student Aid website and checking the holder of the loan.
Loan servicers are Mohela, Aidvantage, Nelnet, Edfinancial, ECSI and CRI.
If a balance is present, Mayotte said to call the servicer and ask for forbearance — a stay in making payments typically due to hardship — “right now.”
“Don’t wait till tomorrow or next week,” she added.
The servicer can grant a 120-day forbearance, allowing for time to decide how to proceed with repayment.
Tip: Weigh options for resolving default
There are three main ways to get out of default, which are paying a loan in full, loan rehabilitation and loan consolidation.
Rehabilitation involves making nine consecutive, on-time payments based on income, after which the loan is taken out of default and placed in good standing again. Mayotte said this option is longer, but offers more benefits for the borrowers. One benefit is that collection costs — fees owed in addition to the loan payments — are lower (typically around 16%).
Borrowers can also now rehabilitate loans more than once, as a result of the “Big Beautiful Bill.” Ryan Jensema, vice president of the Pennsylvania Association of Student Financial Aid Administrators, called this change a positive one.
Bonus tip: Dispute garnishment
A lesser-known option to avoid wage garnishment is to request a hearing. To do this:
- Write a request and mail it to the Default Resolution Group within 30 days of when the garnishment notice was sent.
- Gather proof that garnishment will lead to significant financial hardship, or that it can’t be enforced because you have been employed for less than a year after being fired from another job. This will be useful for the hearing.
Hearings could be in person, over the phone, or not needed based on the strength of the records backing up the request. The DRG will make a decision within 60 days of when the hearing request was received. If granted, either partial garnishment will occur or no garnishment for 12 months.
For more information, read here.
Consolidation, which combines multiple loans into one, is faster and would occur after making fewer payments on the defaulted loan. Once the loan has been released for consolidation, Mayotte said a borrower is then eligible for lower payments, as good standing is restored.
Collection costs for consolidation tend to be higher (typically around 18.5%), and Jensema said “it’s not always the best option for everybody to do.”
After loans go into default and have moved to the Default Resolution Group, there is a 60-day window before collection fees are applied. During this timeframe, getting on a payment plan, beginning rehabilitation or consolidation can all prevent incurring these costs. A payment plan, however, does not take loans out of default, which will negatively affect a credit score.
Miss the 60-day window and you can expect significant collection costs, Mayotte said.
Tip: Turn to trusted sources for help
Whenever a change to student loans or federal aid is announced, Jensema said bad actors try to take advantage of people. He recommended not giving information away to anyone who asks for payment in exchange for loan counseling, adding that there is “no reason” for this to cost money.
Jensema also said to reach out to an alma mater’s financial aid administrators for advice, particularly if there’s apprehension about cold-contacting loan servicers or the Department of Education.
Local financial aid offices
- The University of Pittsburgh: 412-624-7888
- Carnegie Mellon University: 412-268-8186
- Carlow University: 412-578-6389
- Chatham University: 412-365-2781
- Community College of Allegheny County: 412-237-2222 (press 1, then 2)
- Duquesne University: 412-396-6607
- La Roche University: 412-536-1125
- Point Park University: 412-392-3930
- Robert Morris University: 412-397-6250
The Debt Collective, a union of debtors, urges borrowers to think twice before refinancing loans to a private lender. While it may seem like a good option, press secretary Braxton Brewington said it could lead to falling into a predatory situation.
The union plans to circulate information about options for those who may be impacted by the move to garnish wages again, and ramp up advocacy for the Trump administration to reverse course.
Brewington said it’s important for people to understand that “the beginning of the garnishment process is not the end.”
Tip: Remember, life happens
Defaulting on loans can be stigmatizing, and while it’s easy to feel ashamed about it, Jensema advised against ignoring the situation.
“Make that first step of making that call to your loan servicer and say, ‘I’m having difficulty making payments right now. Is there something that I can do?’”
Getting a sense of the available options can help unload some of the emotional and financial weight, he said, but one of the most important things to remember is there are others in the same position.
Said Mayotte: “We took 40 million people that were in the habit of making their payment out of that habit,” during the yearslong pause on student loan repayment due to the pandemic.
Now, in 2026, she said the cost of living is higher, and wages haven’t increased to match it. It’s no surprise to her that people would have defaulted in the time since repayment began in late 2023.
Her only advice? Regardless of why it’s happened, try to get out of default.
“I hear from a lot of borrowers who sort of throw their hands up. They’re like, ‘Well, I can’t afford payment, so might as well let it default and do wage garnishment,’” she said. “I’m here to tell them that default is always more expensive, whether it be monthly or whether it be in the long term.”
Maddy Franklin reports on higher ed for Pittsburgh’s Public Source, in partnership with Open Campus, and can be reached at madison@publicsource.org.
This story was fact-checked by Katherine Weaver.
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