Education Department to delay collections on defaulted student loans

Education Department to delay collections on defaulted student loans

Published Fri, Jan 16 2026

3:33 PM EST

Updated 5 Min Ago

Key Points

• The Department of Education announced Friday it would delay involuntary collections for federal student loans, including wage garnishments.
• Defaulted borrowers were to be notified beginning the week of Jan. 7 that their wages would be garnished.
• The Department said the delay gives it more time to implement student loan repayment reforms.

U.S. Education Secretary Linda McMahon attends a press briefing with White House Press Secretary Karoline Leavitt (not pictured) at the White House in Washington, D.C., U.S., November 20, 2025.

Evelyn Hockstein | Reuters

The Education Department announced on Friday that it will delay the implementation of wage garnishment and other involuntary collection efforts affecting defaulted student loan borrowers.

The department said the delay affects involuntary collections on federal student loans including through wage garnishments and the Treasury Offset Program, which is used to seize some or all of borrowers' payments from the government including tax refunds, Social Security benefits.

"The temporary delay will enable the Department to implement major student loan repayment reforms under the Working Families Tax Cuts Act...to give borrowers more options to repay their loans," the department said in the announcement.

The Working Families Tax Cut Act is another name for President Donald Trump's "big beautiful bill."

The announcement comes days after Secretary of Education Linda McMahon told reporters in Rhode Island that garnishments would be paused.

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The Trump administration announced in April that it would resume collection activity on student loans starting in May. Before that announcement, collections had been paused since 2020 in response to the Covid-19 pandemic. In June, the department paused its plan to garnish Social Security payments.

Then in December, the department confirmed around 1,000 borrowers would receive notification of intent to garnish wages during the week of Jan. 7, with more notices to follow.

More than 42 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion, according to the Congressional Research Service.

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