Student loan wage garnishment is returning in early 2026, and employers will be pulled into the middle of a problem they didn’t create. The Department of Education has confirmed that garnishment notices went out the week of Jan. 7, 2026. Under federal rules, administrative wage garnishment can require employers to withhold up to 15% of after-tax pay for employees who have defaulted on federal student loans, putting HR and payroll on the front line.
This shift arrives amid continued volatility in federal repayment options. Many borrowers made financial decisions based on what they believed their payments would be under the SAVE plan, and now face plan changes and transitions that can bring further confusion and, for some, higher payments.
