What to Do Now
- Step 1. Check StudentAid.gov (a red default box on your dashboard) and MyEdDebt.ed.gov (look for “Certified for TOP” or “Account is in AWG”).
- Step 2. Find who holds your loan: the Default Resolution Group (DRG) or a guaranty agency.
- Step 3. If you get a notice, mark the 30-day deadline (wages) and the 65-day deadline (refund).
- Step 4. Choose an exit route: rehabilitation, consolidation, or a repayment agreement.
→ Plan your way out of default and calculate your deadlines, and see the official option most guides skip — a repayment agreement that can stop garnishment if you act within 30 days.
Default Exit Planner and Deadline Calculator
Enter what you know and this tool returns your status, your notice deadlines, and the four exit routes ranked for your priority. It runs in your browser, saves nothing, and never asks for a Social Security number or account numbers.
Plan my way out of default
About your loan
Notices you received (optional)
Your priority
Your plan
Is Student Loan Wage Garnishment Back in 2026?
No restart has been officially announced: as of October 9, 2026, ED's January 16 delay of wage garnishment and Treasury offset is the latest status we could find.
In that announcement, ED said it would delay involuntary collections on federal student loans, including Administrative Wage Garnishment (AWG) and the Treasury Offset Program (TOP), while it puts repayment reforms in place. The new repayment plan was to be available beginning July 1, 2026, and ED said the delay gives defaulted borrowers more time to consolidate or complete a repayment or rehabilitation agreement, including a second rehabilitation. News coverage of the announcement reported that ED did not set a new date.
A pause isn't forgiveness.
The delay changes what ED is doing today. It does not change your loan's status. A defaulted loan stays in default, and collections can resume. FSA says you receive written notice before wage garnishment or Treasury offset begins, which is why the notice date matters later in this guide.
What you may have read elsewhere. Some blogs and trade outlets have said a restart is expected this fall or after the repayment reforms take hold. We found no official ED or Treasury announcement with a date, so treat those claims as unconfirmed. Separately, Treasury and ED are changing who runs defaulted-loan operations. Under their partnership, Treasury is to take over operational responsibility for collecting defaulted loans and for the Default Resolution Group, so the places you call, pay, and log in may change (Treasury fact sheet).
On September 30, 2026, Treasury and ED launched the Defaulted Loans Support Center. It lets borrowers compare ways out of default, apply online to rehabilitate or consolidate, upload documents, make a payment, and review repayment plans and discharge options (Treasury release).
| Date | Announcement | Source |
|---|---|---|
| Apr.–May 2025 | ED announced collections on defaulted loans would restart; Treasury offset resumed May 5, 2025, with wage garnishment notices expected later. | CBS News, reporting ED's announcement |
| Dec. 2025 | ED said it would begin sending wage garnishment notices to about 1,000 borrowers the week of Jan. 7, 2026, then scale up month to month. | CBS News, reporting ED's statement |
| Jan. 16, 2026 | ED delayed involuntary collections, including AWG and TOP, to implement repayment reforms. | ED press release |
| July 1, 2026 | Date ED's release gave for the new repayment plan (RAP) to become available. | ED press release |
| Sept. 30, 2026 | Treasury and ED launched the Defaulted Loans Support Center for online rehabilitation and consolidation. | Treasury press release |
| Oct. 9, 2026 | No official restart date found. | AdvoraHQ check of the sources above |
Default vs. Collections: Where You Stand
Your federal loan goes into default after 270 or more days without scheduled payments, and involuntary collections may begin after 360 or more days. Those are two different stages, and the three tiers below tell you which one you are in.
Act before the deadline
You have a notice, or expect one. The 30-day and 65-day clocks are your leverage.
Already in collections
Wages are being garnished or a refund was offset. Your options change.
Clean-up mode
Collections are quiet. Use the time to repair your credit history through rehabilitation.
- Day 1. You miss a payment and the loan is delinquent.
- Day 270. The loan is in default.
- About day 335. If no action is taken within 65 days of default, the Default Resolution Group reports the default to the credit bureaus (Equifax, Experian, Innovis, TransUnion).
- Day 360 and later. Involuntary collections may begin, after written notice.
- Notice sent. The 30-day window (wages) and 65-day window (refund) start on the date the notice was sent.
Who collects depends on who holds your loan. ED-held loans go to the Default Resolution Group (DRG). Commercially held FFEL loans go to a guaranty agency, a small group of borrowers. Private student loans are not federal loans; see Debt Collector Rights and Broke and Sued for Debt?.
| Loan type | Collector | Contact |
|---|---|---|
| Direct Loans and other ED-held loans | Default Resolution Group (DRG), with Treasury taking over operations | 1-800-621-3115; Defaulted Loans Support Center; MyEdDebt.ed.gov |
| Commercially held FFEL loans | A guaranty agency | Find it under "My Loan Servicers" on StudentAid.gov |
| Federal Perkins Loans | The school or ED; check your account | StudentAid.gov. Perkins rehabilitation requires nine consecutive payments. |
| Private student loans | Your lender or a collector; not covered by these federal rules | See the articles linked above |
How to Check Your Status in 5 Minutes
Log in to StudentAid.gov first, then MyEdDebt.ed.gov, and you will see whether your loan is in default, who holds it, and whether it has been sent for collection.
- Step 1. Log in to StudentAid.gov with your FSA ID. A federal loan in default shows a warning in a red box on your dashboard.
- Step 2. Open "My Loan Servicers" to see who holds each loan. If it is a guaranty agency, note its name and number.
- Step 3. Go to MyEdDebt.ed.gov. Your StudentAid.gov username and password will not work there, so you sign in to MyEdDebt separately.
- Step 4. Look for "Certified for TOP" (Treasury offset) and "Account is in AWG" (wage garnishment). Note the dates shown.
- Step 5. If anything looks wrong, call the Default Resolution Group at 1-800-621-3115. Use only the numbers and sites on this page or on StudentAid.gov.
Got a Notice? Your 30-Day and 65-Day Deadlines
You have 30 days from the date a wage garnishment notice was sent, and 65 days from the date a Treasury offset notice was sent, to act before collection begins.
Act before the deadline
Count from the date printed on the notice, not the day it reached you. Hearing requests must be postmarked by the deadline, and repayment-agreement payments must arrive by it. Keep copies and proof of mailing.
30 days for wages, 65 days for refunds.
| Notice | Deadline | What it stops |
|---|---|---|
| Wage garnishment (AWG) | 30 days from the date the notice was sent | A hearing request postmarked by day 30 temporarily pauses garnishment until after the hearing. A first repayment-agreement payment made by day 30 avoids garnishment. |
| Treasury offset (TOP) | 65 days from the date the notice was sent | A first repayment-agreement payment made within 65 days avoids offset of your refund and certain federal benefits. A dispute must be postmarked within the 65 days. |
| Discharge claims (borrower defense, total and permanent disability) | No deadline | These are separate from collection deadlines; ask the Default Resolution Group how they affect collection. |
Your hearing rights. You can ask for a hearing in writing, postmarked within 30 days of the notice date. The request form comes with your notice and is linked from FSA's Collections page. A hardship hearing is where you document that garnishment would leave you unable to cover basics, so gather pay stubs and bills early (see the checklists). You can also dispute a Treasury offset within 65 days.
The tool above counts these dates for you. If a deadline has already passed, call DRG or your guaranty agency anyway. A late request may still be considered, even if it doesn't automatically pause collection.
How Much Can They Take?
Federal law caps a student loan garnishment at the lesser of 15% of your disposable pay or the amount by which your weekly disposable pay exceeds $217.50. The $217.50 is 30 times the $7.25 federal minimum wage.
The 15% cap comes from 20 U.S.C. § 1095a. The $217.50 floor comes from the Consumer Credit Protection Act (15 U.S.C. § 1673), which the Department of Labor says also applies to student loan garnishment (DOL Fact Sheet #30). If your weekly disposable pay is $217.50 or less, nothing can be garnished. For paychecks that aren't weekly, the floor scales up: $435.00 every two weeks, $471.25 twice a month, and $942.50 a month.
"Disposable pay" is what remains of your pay after health insurance premiums and amounts the law requires to be withheld, such as income tax and Social Security and Medicare taxes (34 CFR § 34.3). Other voluntary deductions, such as retirement contributions, generally don't reduce it. Ask your payroll department which of your deductions count. ED's procedure is in 34 CFR Part 34.
Garnishment Amount Calculator
Calculate the maximum
Your pay
Your result
| Weekly disposable pay | 15% of pay | Over $217.50 | Maximum garnishment |
|---|---|---|---|
| $200.00 | $30.00 | $0.00 | $0.00 |
| $250.00 | $37.50 | $32.50 | $32.50 |
| $300.00 | $45.00 | $82.50 | $45.00 |
| $500.00 | $75.00 | $282.50 | $75.00 |
| $1,000.00 | $150.00 | $782.50 | $150.00 |
Your Four Ways Out of Default
Federal Student Aid lists four ways out of default — rehabilitation, consolidation, a repayment agreement, or paying in full — and each trades speed against what happens to your credit history.
Rehab cleans the default record; consolidation doesn't.
-
Rehabilitation
Speed: Nine payments within 10 months; it takes months. FSA's table notes it may need fax or mail, but the new Support Center now lets you apply online.
Credit record: Removes the default record after the 9th payment. Late payments reported before default remain.
Costs: Avoids collection fees.
-
Consolidation
Speed: Faster, with an online application.
Credit record: The default record remains on your credit history, for up to 10 years.
Costs: Unpaid interest is capitalized and collection costs are added. Generally unavailable once a garnishment order is in place.
-
Repayment agreement
Speed: Your first payment must come within 30 days of a garnishment notice, or 65 days of a Treasury offset notice.
Credit record: The default record remains.
Costs: Avoids collection fees.
-
Pay in full
Speed: As soon as you can pay.
Credit record: Ask your loan holder how the account will be reported.
Costs: The full balance, including interest and any collection costs.
| Route | Speed | Credit record | Costs |
|---|---|---|---|
| Rehabilitation | Nine payments within 10 months; takes months. May need fax or mail per FSA's table; the Support Center now offers an online application. | Removes the default record after the 9th payment. Late payments reported before default remain. | Avoids collection fees. |
| Consolidation | Faster, with an online application. | The default record remains, for up to 10 years. | Unpaid interest is capitalized and collection costs are added. Generally unavailable under a garnishment order. |
| Repayment agreement | First payment within 30 days of a garnishment notice, or 65 days of an offset notice. | The default record remains. | Avoids collection fees. |
| Pay in full | As soon as you can pay. | Ask your loan holder how the account will be reported. | The full balance, including interest and any collection costs. |
The Repayment Agreement: The Option Most Guides Skip
A repayment agreement is a plan you negotiate with your loan holder, and making the first payment on time can stop garnishment or offset before they start. FSA says a first payment made within 30 days of the garnishment notice avoids garnishment, and within 65 days of the Treasury offset notice avoids offset. It also avoids collection fees.
It is the fastest way to stop a notice, but it does not remove the default record. Treat it as a bridge: stop the clock now, then pursue rehabilitation. A payment plan is not a rehabilitation agreement, so ask for rehabilitation by name and confirm in writing that your payments count toward it.
Rehabilitation vs. Consolidation: Which Fits You?
Choose rehabilitation if you want the default off your credit history and can make nine payments; choose consolidation if speed matters more and you can accept that the record stays.
Clean-up mode
While collections are delayed, you have room to repair your credit history through rehabilitation. It is the only route that removes the default record.
Credit record. Rehabilitation removes the record of the default after the 9th payment, though late payments reported before default remain. Consolidation leaves the record on your credit history (FSA's table says up to 10 years).
Cost. Rehabilitation avoids collection fees. Consolidation capitalizes unpaid interest and adds collection costs. The Sept. 30 Treasury release says borrowers who consolidate through the new portal can then access ED's temporary 1% interest rate reduction by enrolling in auto pay; check ED's page for eligibility and enrollment deadlines.
Speed and effort. Consolidation is the faster route. Rehabilitation requires nine voluntary, on-time payments within 10 consecutive months. For Direct and FFEL loans, FSA says you may miss one payment within the 10 months; for Perkins Loans the nine payments must be consecutive. Only voluntary payments count, so money taken by garnishment or offset does not. Your payment is based on your income; if the amount offered is unaffordable, ask about the Loan Rehabilitation Income and Expense form.
PSLF. The two routes can affect your qualifying-payment count differently. See PSLF and Forgiveness Considerations before you choose.
Second rehabilitation. Today you generally get one rehabilitation per loan. ED and Treasury have said a second rehabilitation opportunity is part of the new law, and it is scheduled to be permitted starting July 1, 2027. See CRS report R48727. If you have rehabilitated before, you cannot count on a second attempt until then.
Not sure? Use the planner and pick your priority. Don't drain a retirement account to get out of default; see 401(k) Loan vs. Hardship Withdrawal before trading one crisis for another.
If Garnishment Has Already Started
If wages are already being garnished, rehabilitation can stop it after your fifth qualifying payment, and consolidation is generally off the table until the order is lifted.
Already in collections
First, confirm who is collecting. ED has delayed its own garnishment, so wages withheld right now may come from a guaranty agency, a school, or another creditor. Call the Default Resolution Group at 1-800-621-3115 and ask.
The fifth-payment rule. FSA says involuntary collections may continue until at least the fifth rehabilitation payment. For guaranty-agency loans, 34 CFR § 682.405 requires the agency to keep garnishing until five qualifying payments are made, then to suspend the garnishment order unless you direct otherwise. You may pay both the garnishment and your voluntary payments during those months, so budget for it.
Consolidation limits. State and borrower-advocate guidance based on FSA's rules says you generally cannot consolidate out of default while a garnishment order is in place. Ask your loan holder whether the order can be lifted first. Confirm on StudentAid.gov before relying on any route.
Your protections. You can ask about a hearing or hardship review, and federal law prohibits an employer from firing you because of a student loan garnishment. Discharging student loans in bankruptcy requires showing undue hardship, which is a high bar; talk to a lawyer first (see Bankruptcy Lawyer). Free legal aid may help if you can't afford one.
Will They Take Your Tax Refund?
Treasury offset can withhold a federal tax refund and certain federal benefits for a defaulted federal student loan, but ED has delayed it, and you get notice and 65 days first.
The Treasury Offset Program (TOP) can take some or all of a refund. ED's January 16 delay covers TOP as well as wage garnishment, and we found no restart date. We can't predict whether the delay will still be in place when you file in early 2027. For refund timing, see the 2026 Tax Refund Schedule. TOP can also reach certain federal benefits; for a different federal debt, see Social Security Overpayment.
If you get a Treasury notice. You have 65 days from the date it was sent to make a first repayment-agreement payment or get a dispute postmarked. Check MyEdDebt for "Certified for TOP" before you file.
Injured spouse. If you file a joint return and your spouse owes the defaulted loan, you can ask the IRS for your share of the refund with Form 8379, Injured Spouse Allocation. File it with your joint return, or alone after you learn an offset happened or is expected. You file it for each year you want your share, and there is a time limit for claiming a share after an offset (generally the later of three years after the return's due date or two years after the payment), so check the current instructions. Don't file it if you are claiming innocent spouse relief.
FFEL Loans and Guaranty Agencies
If a guaranty agency holds your FFEL loan, ED's delay may not cover it, so contact the agency directly and don't assume you are protected.
FFEL loans were made by banks and other private lenders under a federal guarantee. When one defaults, a guaranty agency often takes it over. ED's January announcement concerns the Department's own involuntary collections. Law-firm and borrower-advocate guidance says guaranty agencies may still garnish wages or refer a borrower for offset. We did not find an ED statement addressing guaranty agencies, so check with yours.
Find your agency under "My Loan Servicers" on StudentAid.gov. Ask the same questions as for DRG: your rehabilitation payment, whether consolidation is available, and what collection costs apply. The rehabilitation rules for FFEL loans track the Direct Loan rules, including nine payments within 10 months and the fifth-payment rule for garnishment.
PSLF and Forgiveness Considerations
Default blocks Public Service Loan Forgiveness progress, so getting out matters, but rehabilitation and consolidation can affect your payment count differently.
According to FSA's PSLF guidance, defaulted Direct Loans are not eligible for PSLF, and payments made while in default do not count. How consolidation or rehabilitation affects your existing count depends on your history, and the rules have changed over the years. Older guidance says consolidation resets the count; newer rules credit some earlier payments. We could not confirm the current FSA wording, so get your count from StudentAid.gov and ask the Default Resolution Group before choosing.
For other programs, see Student Loan Forgiveness Programs. If forgiveness arrives later, see Is Student Loan Forgiveness Taxable?.
After You're Out of Default: RAP and Beyond
Once you are out of default, you can choose a repayment plan again, and ED's new Repayment Assistance Plan (RAP) is one of the options.
ED said the new repayment plan would be available beginning July 1, 2026. The Defaulted Loans Support Center also has a section for reviewing repayment plans. Our guide to the RAP Plan covers how it works. Pick a payment you can keep up with, because defaulting again is costly. If your income drops, call your servicer before you miss a payment.
Scams to Avoid
The Default Resolution Group does not charge fees, so anyone asking you to pay for "enrollment," a "subscription," or "maintenance" to fix your default is not the official program.
The Default Resolution Group never charges fees.
Default makes borrowers targets. Common warning signs: a demand for an upfront fee, a promise of guaranteed forgiveness or a guaranteed lower payment, pressure to "act now," and a request for your FSA ID and password. We don't recommend any paid debt-relief company, because everything in this guide is free through the official channels.
- Start only from StudentAid.gov, MyEdDebt.ed.gov, or the Defaulted Loans Support Center.
- If someone calls or emails you, hang up and call 1-800-621-3115 or the number on StudentAid.gov.
- Never share your FSA ID, and never pay a fee to apply for rehabilitation, consolidation, or a repayment agreement.
- Read FSA's scam guidance, and report fraud at ReportFraud.ftc.gov.
Checklists
Use these three checklists to prepare a hearing request, a call to your loan holder, and tax season; copy and paste them into your notes.
Hearing request checklist
- [ ] Hearing request form that came with your notice (also linked from FSA's Collections page)
- [ ] Request postmarked within 30 days of the date the notice was sent
- [ ] Hardship documents: pay stubs, rent or mortgage, utilities, childcare, medical bills
- [ ] Copies of everything you send, plus proof of mailing
Before you call the Default Resolution Group or your guaranty agency
- [ ] Loan IDs and balances from MyEdDebt.ed.gov or StudentAid.gov
- [ ] Income documents for calculating the rehabilitation payment
- [ ] Ask: What is my rehabilitation payment, and can it be lowered with the income and expense form?
- [ ] Ask: Is consolidation available for my loans?
- [ ] Ask: What collection costs apply to each route?
- [ ] Ask: How will each route affect my PSLF count?
- [ ] Write down the date, the name of the person you spoke to, and what was agreed
Tax-season checklist
- [ ] Check MyEdDebt.ed.gov for "Certified for TOP"
- [ ] Watch for the Treasury notice and mark the 65-day deadline
- [ ] File jointly with a spouse who doesn't owe the loan? Consider Form 8379 (Injured Spouse Allocation)
Frequently Asked Questions
Is student loan wage garnishment back in 2026?
Not according to any official announcement we found as of October 9, 2026. ED delayed wage garnishment and Treasury offset on January 16, 2026, and neither that announcement nor Treasury's September 30 release sets a restart date.
Are student loan collections paused right now?
ED's delay covers wage garnishment and Treasury offset on federal student loans. It is a delay, not forgiveness, and loans held by guaranty agencies may not be covered.
When will garnishment resume?
No date has been announced. FSA says you receive written notice before wage garnishment or Treasury offset begins, so a notice is your signal.
How do I know if my loan is in default?
Your StudentAid.gov dashboard shows a warning in a red box for a federal loan in default, and MyEdDebt.ed.gov shows the details. Default begins after 270 or more days without scheduled payments.
What's the difference between default and collections?
Default starts at 270 or more days. Involuntary collections, such as wage garnishment and Treasury offset, may begin after 360 or more days and after written notice.
What does a 30-day garnishment notice mean?
It says your loan holder intends to garnish your wages in 30 days, and it describes the debt and your rights. Day 30 is the deadline to get a hearing request postmarked or your first repayment-agreement payment received.
How do I request a hearing?
Send a written request using the form that comes with your notice, postmarked within 30 days of the date the notice was sent. That temporarily pauses garnishment until after the hearing. Include hardship documents and keep proof of mailing.
How much of my paycheck can be garnished?
The lesser of 15% of your disposable pay or the amount by which your weekly disposable pay exceeds $217.50 (30 times the federal minimum wage). If your weekly disposable pay is $217.50 or less, nothing can be garnished. Use the calculator above.
Can student loans take my entire tax refund?
Treasury offset can take some or all of a refund and certain federal benefits for a defaulted federal loan. You get written notice and 65 days first, and ED has delayed offset as of this writing.
How many days do I have before a Treasury offset?
Sixty-five days from the date the Treasury notice was sent. A first repayment-agreement payment within that window avoids the offset.
Can my spouse get their share of the refund back?
Often yes. A spouse who doesn't owe the loan can file IRS Form 8379, Injured Spouse Allocation, to request their share of a joint refund.
Rehabilitation or consolidation — which is better?
Rehabilitation removes the default record and avoids collection fees but takes nine payments. Consolidation is faster but leaves the record and adds costs. The right choice depends on your priority; try the planner.
Does consolidation remove the default from my credit report?
No. FSA's table says the record of the default remains on your credit history after consolidation, for up to 10 years. Only rehabilitation removes it.
How many payments does rehabilitation take?
Nine voluntary, on-time payments within 10 consecutive months. For Direct and FFEL loans you may miss one in that period; Perkins Loans require nine consecutive payments.
What happens after the fifth rehab payment?
Wage garnishment can be suspended after your fifth qualifying payment, and FSA materials say involuntary collections may continue until then. Ask your loan holder whether a Treasury offset also stops at that point for your loan.
Can I consolidate if my wages are already garnished?
Generally not while a garnishment order is in place. Ask your loan holder whether the order can be lifted first, or use rehabilitation instead.
What is a repayment agreement?
A payment plan you negotiate with your loan holder. A first payment within 30 days of a garnishment notice, or 65 days of an offset notice, avoids garnishment or offset and collection fees, but the default record remains.
Can I rehabilitate a loan twice?
Generally not today. A second rehabilitation is scheduled to be permitted starting July 1, 2027, under the 2025 law.
Are FFEL loans treated differently?
They are collected by a guaranty agency rather than DRG, and ED's delay may not apply to them. Contact your guaranty agency to find out.
Does default affect PSLF?
Yes. Defaulted Direct Loans are not eligible for PSLF, and payments made in default don't count. Check how rehabilitation or consolidation would affect your count before choosing.
Is the Default Resolution Group legitimate?
Yes. It is part of ED's Federal Student Aid, and its number is 1-800-621-3115. It does not charge fees. Treasury is taking over its operations, so verify any contact by logging in to StudentAid.gov.
Is there a statute of limitations on federal student loans?
No. Federal law removes the time limit on collecting these loans (20 U.S.C. § 1091a). That differs from most other debts; see Statute of Limitations on Debt.
Official Sources Used in This Guide
- U.S. Department of Education press release, Jan. 16, 2026
- Federal Student Aid: Student Loan Default and Collections FAQs; Collections page; Getting Out of Default; Rehabilitation FAQs; Scams
- Treasury and ED press release, Defaulted Loans Support Center, Sept. 30, 2026; Treasury-ED fact sheet
- 20 U.S.C. § 1095a (15% cap); 15 U.S.C. § 1673 and DOL Fact Sheet #30 ($217.50 floor); 29 CFR § 870.10 (non-weekly pay periods)
- 34 CFR Part 34 and § 34.3 (administrative wage garnishment; disposable pay); 34 CFR § 682.405 (FFEL rehabilitation); 20 U.S.C. § 1091a (no statute of limitations)
- IRS Form 8379, Injured Spouse Allocation
- CRS R48727, 2025 law changes including second rehabilitation
Last updated: . We re-verify the status weekly while collections policy is in flux.
This guide is general information, not legal or financial advice. Collection policies are changing; the status was verified on October 9, 2026. Confirm with Federal Student Aid, the Default Resolution Group, or your guaranty agency, and contact legal aid if you need help.
Daniel Hayes is the founder and sole researcher at AdvoraHQ. He covers U.S. personal finance, insurance, and consumer law — working directly from IRS publications, federal and state statutes, court opinions, and SEC filings rather than secondary summaries. His focus is the gap between what readers think they know and what the source documents actually say. Daniel is not a licensed attorney, CPA, or financial advisor; his articles are educational and not personalized advice. Reach him at Daniel.Hayes@advorahq.com.
