Student loan defaulters face return of wage deductions in 2026

Federal authorities in the United States are set to restart wage garnishment for borrowers who have defaulted on student loans, marking a decisive shift after years of pandemic era relief. The US Department of Education had suspended involuntary collections, including paycheck deductions, during the Covid-19 crisis. From early 2026, employers may again be required to withhold a portion of wages for loan repayment without a court order. Officials say the move aims to restore discipline to the federal loan system while encouraging borrowers to explore rehabilitation and repayment options before enforcement resumes.