Story perspectives

U.S. Pauses Wage Garnishments for 9 Million Defaulted Borrowers

1/21/2026

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Summary

Story summary

The U.S. Department of Education paused wage garnishments and tax refund seizures for student loan borrowers in default.
The pause aims to implement reforms from a tax and spending cut bill signed by U.S. President Donald Trump in 2025, expanding borrowers' repayment options.
Around 9 million borrowers are in default.
Experts advise filing federal tax returns promptly to protect refunds and consider loan consolidation or rehabilitation to regain good standing.

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Story summary

The U.S. Department of Education paused wage garnishments and tax refund seizures for student loan borrowers in default.
The pause aims to implement reforms from a tax and spending cut bill signed by U.S. President Donald Trump in 2025, expanding borrowers' repayment options.
Around 9 million borrowers are in default.
Experts advise filing federal tax returns promptly to protect refunds and consider loan consolidation or rehabilitation to regain good standing.