Department of Education To Resume Wage Garnishments For Millions of Americans Amidst a National Affordability Crisis

SDCC
3 minutes ago
2 min read

FOR IMMEDIATE RELEASE

January 7, 2026

Contact: Natalia Abrams

Washington, D.C. – After more than 5 years, the Department of Education (ED) announced on December 23, 2025 its intent to resume administrative wage garnishment for Americans who have defaulted on their federal student loans. According to ED, beginning the week of January 7, over 1,000 Americans will receive letters notifying them that their wages will be garnished within 30 days. The number of Americans receiving these notices will surge in the coming weeks, and the risk of withheld paychecks and tax refunds will increase for millions in the months ahead.

The Student Debt Crisis Center (SDCC) unequivocally condemns the Department of Education’s decision to resume wage garnishments in the middle of a worsening affordability crisis in the United States and demands an immediate halt to these debt collection practices.

As the Department of Education prepares to seize wages and tax refunds, SDCC is urging borrowers who have defaulted on their federal student loans to explore their options.

“This is not a personal failure – it is a failure of the Department of Education. In just one year under the Department’s current leadership, a 50% workforce reduction has coincided with an 800,000 application backlog for Income-Driven Repayment plans, harming millions of families and communities,” said Natalia Abrams, SDCC President & Founder. “These actions will only add to the confusion and delays. With more than 5 million Americans already in default and millions more at risk, the Department is choosing punishment over protection by garnishing wages and tax refunds. It must immediately halt these actions and protect Americans’ livelihoods.”

One borrower with defaulted loans shared, “This student loan has put me in so much debt, it’s hard for me to pay bills or even keep up on any. It has failed my credit score and I am unable to get a tax return, it is always taken when I really need it.”

“I completed my degree when I was in my 50s. I was determined to get my degree. For almost a decade I had no difficulty making my payments. My husband became ill and passed away, making it financially difficult to keep my bills up to date. My rent has gone up and an increase in food prices makes it difficult to budget on a fixed income every month,” another borrower shared.

The lasting impacts of wage garnishments will be detrimental to Americans. While the country grapples with a worsening affordability crisis, borrowers are struggling to stay afloat. Garnishing from hard-earned wages puts Americans in even greater precarious financial situations. The Department of Education must refocus on its core mission of serving the American public.

For more information or to schedule an interview, please contact Natalia Abrams at info@studentdebtcrisis.org.

###

ABOUT Student Debt Crisis Center

Student Debt Crisis Center is a national advocacy organization with 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.