Feds will start garnishing wages for thousands of GA residents starting this week

As promised, the Trump administration will begin to collect repayment for student loans and some Georgia borrowers could soon see their paychecks shrink as the U.S. Department of Education restarts wage garnishments for borrowers in default.

Data from the Georgia Budget and Policy Institute (GBPI) reveals almost 2 million people in Georgia carry student loan debt, owing billions in student loans. This is just a fraction of the 44 million Americans borrowers with debt in the trillions.

With collection efforts, both voluntary and involuntary underway, many state residents could face major financial hardships.

Loan data across the US

Data from the Federal Student Aid Commission, (FSA) an office within the Department of Education (DOE), offers a snapshot of the national landscape.

• Close to 5.3 million federal borrowers are in default as of mid‑2025 
• Nearly 10 million are expected to be in default after new collections begin 
• Almost 25% of the federal loan balance is in default

Student loans in Georgia

Georgia is one of the hardest‑hit states for student debt, ranking near the top nationally for average student loan debt, and is a particularly heavy debt state compared with most others.

The data for Georgia:

• 1.7 million owe federal or private student loans 
• $71 billion in total combined debt
• 15% of residents have student debt
• 47% ​of borrowers are under the age of 35

Because Georgia ranks near the top for average debt and delinquency risk, thousands of Georgia borrowers are likely among those in default or late‑stage delinquency.

How the garnishment process will work

After a years‑long pause that began in March 2020, The Department of Education is restarting federal collections on defaulted loans, including wage garnishment and tax refund seizures.

The first wave of notices are set to go out Jan. 7, wage garnishments generally allow the government to take up to 15% of a borrower’s disposable pay from each paycheck without going to court.

The process:

• Default begins after 270 days (9 months) of non-payment
• The entire loan becomes due immediately 
• DOE must send a written notice within 30 days (one month) to explain the amount and the withholding amount and how to respond

Important information:

• Guaranty agencies will also be allowed to restart involuntary collections on older Federal Family Education Loan (FFEL) Program loans
• ​Collections will resume only after borrowers have been given notice and a chance to catch up

Individuals at-risk

Financial website, LendingTree, says defaults and serious delinquencies have spiked nationally since payments restarted, and millions of borrowers are either 90–180 days delinquent or already in default.

Georgia borrowers with high balances and tight budgets are particularly vulnerable.

Highest risk borrowers:

• Those who left school without a degree
• Those attending for‑profit or low‑graduation‑rate schools
• Older borrowers carrying long‑term debt

Signs of loan default:

• There is a red box labeled “default” on your StudentAid.gov account
• Loan has been transferred to the Default Resolution Group or a collection agency
• Received collection letters, emails or texts from FSA about default or notices of Treasury Offset

What to do if you’re in danger

Borrowers still have options to avoid or stop wage garnishment, but those options get narrower once a loan is formally in default. Acting before the 30‑day garnishment window ends is the most critical step.

Steps to take:

• Check each loan’s status to see whether it is current, delinquent, or in default at StudentAid.gov
• ​If you are delinquent (not in default) ask your service provider about income‑driven repayment (IDR), temporary deferment, or forbearance
• ​If you are already in default, reach out to the Default Resolution Group or the collection agency listed in your notices to discuss options

What to do if your wages are garnished

If you receive a wage garnishment notice:

• Respond within the stated deadline to request a hearing
• Avoid debt‑relief scams that charge upfront fees
• Seek out legitimate help in the form of your loan servicer, FSA, or nonprofit legal aid​

The DOE could help

Even as collections restart, federal officials say they plan to pair garnishments with more outreach and easier paths back into affordable repayment.

That includes new tools and plans that Georgia borrowers can use right now:

• Communication plan from FSA 
• Loan Simulator and its AI assistant
• Longer call‑center hours
• New and simplified IDR processes ​

The historic spike in delinquencies and the new collection actions could put undue pressure on Georgia borrowers, even with these new tools in place.

Are you worried about your student debt? Email me at srose@ledger-enquirer.com or find me on social media.