Student-loan borrowers behind on payments are getting a major break

• Education Sec. Linda McMahon said that wage garnishments for defaulted student-loan borrowers are on pause.
• The Education Department later confirmed that the pause applies to wage garnishment and tax refund seizures.
• The pause is intended to be temporary to give borrowers more options to repay their loans, the department said.

Student-loan borrowers in default might not face smaller paychecks — yet.

Education Sec. Linda McMahon told reporters at a visit to a Rhode Island school earlier this week that wage garnishment for defaulted student-loan borrowers has been put on pause.

When asked by a reporter how the garnishment would impact borrowers, McMahon responded: "Well, actually, there is a pause."

"We've now collected about $500 million," McMahon said. "The next phase to go into a place was garnishment, and that's been put on pause for a bit."

The Department of Education confirmed on Friday afternoon that, in addition to wage garnishments, the Treasury Offset Program — which seizes tax refunds — is paused, as well.

"The Trump Administration is committed to helping student and parent borrowers resume regular, on-time repayment, with more clear and affordable options, which will support a stronger financial future for borrowers and enhance the long-term health of the federal student loan portfolio," Undersecretary of Education Nicholas Kent said in a statement.

The department said in its statement that the "temporary delay" is intended to give the administration more time to implement student-loan repayment reforms, including a new income-driven repayment plan that is expected to be rolled out in July.

It follows an announcement from the department in December that said that it would begin sending wage garnishment notices to about 1,000 defaulted borrowers in early January, with the intent to increase the scale of those notices each month.

In May, the department resumed collections on defaulted student loans after a five-year pause. Defaulting on student loans, which typically happens after 270 days of missed payments, can have significant consequences in addition to wage garnishment, including seizure of federal benefits like Social Security and tax refunds.

Aissa Canchola Bañez, policy director at advocacy group Protect Borrowers, said in a statement that the administration's plans to garnish wages "would have been economically reckless and would have risked pushing nearly 9 million defaulted borrowers even further into debt."

Update: January 16, 2026 — This story was updated with a statement from the Department of Education.