By Mary Walrath-Holdridge – USA Today
The federal government has officially resumed garnishing wages and withholding benefits from student loan borrowers after years of legal limbo.
The Trump administration has made several moves to limit repayment options and enforce collections after an extended COVID-era pause. The federal Education Department announced a proposed legal agreement to squash the Saving on a Valuable Education, or SAVE, plan in December 2025, dealing a final blow to the Biden administration’s efforts to forgive or reduce the $200 billion burden of repayment on 5 million federal borrowers.
More than 7 million SAVE borrowers have been in administrative forbearance, not requiring payments, since June 2024. Interest on their debt restarted in August 2025 and the administration announced plans to resume wage garnishment on borrowers behind on payments beginning Jan. 7, according to reports.
Here’s what to know about who is at risk of having money taken from their paycheck.
USA TODAY reached out to the Department of Education for comment.
What happens if you’re behind on student loan payments?
If you miss a payment or two on your federal student loans, you won’t automatically be in bad standing. Your loan will become delinquent on the first day after you miss a payment, usually resulting in late fees or potential dings to your credit score, according to the Federal Student Aid Office (FSA) of the Department of Education.
If you go long enough without making a payment, your loans may go into default, at which time the government can begin involuntary collections, automatically taking money out of your paychecks, tax refund or other federal benefits.
What is wage garnishment?
Wage garnishment is a legal process in which money is withheld from an employee’s paycheck to pay back a debt. The money is collected by employers and sent to the relevant creditors, usually after a court order or other legal notice.
Common reasons for wage garnishment include child support, student loan debt, credit card debt, bankruptcy, or unpaid taxes, according to ADP, a company that provides payroll processing. An employer can face steep fines or legal penalties for failing to garnish an employee’s wages.