Student Loan Borrowers in Default Could See Wages Garnished in Early 2026
NegativeFinancial Markets

- Starting the week of Jan. 7, the Education Department will notify approximately 1,000 of the five million borrowers in default about impending paycheck deductions. The federal government’s student aid website indicates that up to 15 percent of a defaulted borrower’s paycheck may be garnished after other deductions, such as taxes, are accounted for.
- This development signifies a significant financial impact for borrowers in default, as wage garnishment could exacerbate their financial difficulties and hinder their ability to recover from debt, highlighting ongoing challenges within the student loan system.
— via World Pulse Now AI Editorial System
