U.S. Department of Education Announces Pause on Administrative Wage Garnishments and Treasury Offset Program For Millions of Americans With Defaulted Student Loans

SDCC
17 minutes ago
2 min read

FOR IMMEDIATE RELEASE

January 16, 2026

Contact: Natalia Abrams

Washington, D.C. – The Student Debt Crisis Center (SDCC) welcomes today’s announcement that the Department of Education will pause efforts to garnish wages and seize tax refunds for the estimated 5 million student loan borrowers who have defaulted on their federal student loans.

This pause follows sustained pressure from borrowers and advocates, including 17,328 supporters who signed SDCC’s petition calling for an immediate halt to wage garnishment. As a result of this community-driven advocacy, millions of Americans with defaulted student loans can now breathe a little easier without the fear of losing their paychecks or tax refunds.

“The pause on wage garnishments and tax refund seizures is an important and necessary first step to mitigate harm to millions of struggling Americans amidst the national affordability crisis. Americans' financial well-being and livelihoods deserve to be protected,” said Natalia Abrams, SDCC President & Founder. “While this is a welcome first step, this is only a temporary pause. The Department of Education must offer comprehensive student loan debt relief, and agree to stop all collections practices moving forward. No one should ever face the possibility of having their hard-earned wages or tax refunds taken away from them.”

SDCC and partner organizations – Protect Borrowers, American Federation of Teachers (AFT), Debt Collective, NAACP, National Education Association, and Young Invincibles– sent a letter to Secretary of Education Linda McMahon expressing extreme concern regarding the resumption of wage garnishment, and calling for an immediate implementation of borrower safeguards. As both the growing default cliff and tax season approaches, it is imperative that the Department of Education moves toward a more affordable reality for Americans with student debt.

In the meantime, SDCC recommends that borrowers in default should explore their options to get out of default, as this wage garnishment and treasury offset pause is temporary.

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

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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.