Student Loan Changes in 2026: Wage Garnishment and SAVE Plan Updates

Student Loan Default and Wage Garnishment

• ⚠️ Over 5.5 million borrowers are actively in student loan default, with more than 3.5 million in late-stage delinquency, putting over 9 million at high risk for wage garnishment.
• 💰 Beyond wage garnishment, the federal government can seize Social Security payments and tax refunds without a court order for defaulted loans.
• ⏰ Borrowers in default must take action quickly, typically within 65 days of receiving a notice, to prevent garnishment.

Options to Prevent Garnishment

• 🤝 Borrowers can enter into a repayment agreement to avoid garnishment.
• 📜 They can explore if their loan is eligible for an existing discharge program.
• 🛠️ Several pathways exist to resolve the default status of their loans.

Challenging Garnishment and Loan Forgiveness

• ❓ Borrowers who believe they received a garnishment notice in error, do not owe the debt, or are eligible for a discharge program can request a hearing.
• 🩺 The Total and Permanent Disability (TPD) discharge program is a key option for borrowers with severe disabilities to have their loan balance forgiven.
• 📉 Options for full balance discharge have decreased, especially after recent legislation, but fraud by an institution may still qualify for some relief.

Preparing for Repayment Plan Changes

• 💡 Borrowers should be aware of upcoming changes to repayment options, including the end of the SAVE repayment plan.
• 💻 It is crucial for all borrowers to log into their Department of Education account to understand their loan status, current repayment plan, and eligibility for income-based repayment plans.
• 🌱 Income-based plans can help lower monthly payments, maintain good standing, and prevent default.