Borrowers who have fallen behind on their federal student loan payments could soon see their paychecks shrink.
If you still owe on your student loan and you haven’t been keeping up with your payments, you could get a letter in the mail stating that your wages could soon be garnished.
The federal government started notifying borrowers in default last week. Many warning letters have already been sent, and more are on the way, according to Jennifer Finetti, director of student advocacy with ScholarshipOwl.
“About 1,000 letters went out on Jan. 7, and the federal government has said they’re going to be sending out more letters every week,” Finetti said.
Even borrowers who have not yet received a letter may still be at risk. Under federal guidelines, a loan is considered in default if payments have not been made for roughly seven months.
Once in default, the government may garnish up to 15% of a borrower’s net income, with the amount automatically deducted from their paycheck.
“If your wages are garnished, you won’t have any say,” Finetti said. “It’ll be a notification that goes to your employer, and your employer will be responsible for deducting those wages and sending the garnished amount to the federal government.”
Finetti urges anyone who receives a notice or knows they are behind on payments to act immediately by contacting their loan servicer. Borrowers can find out who services their loan by visiting StudentAid.gov.
“I know sometimes the instinct is to bury your head in the sand and just hope it will all go away,” Finetti said. “But unfortunately, it will not. So your best bet is to take some power back, take some control, contact your loan servicer, talk it out, and figure out what you can do to get your loans into good standing.”
Finetti said borrowers should also be aware of upcoming changes to federal student loan repayment. Starting on July 1, 2026, borrowers will be limited to just two repayment plans.
Also, zero-dollar payments based on hardship or unemployment may no longer be available.
For students currently in school, Finetti recommends applying for grants and scholarships and seeking work opportunities to avoid taking on too much debt.