After a years-long pause, the Department of Education resumed collecting defaulted federal student loans through wage garnishment in January 2026. The first notices went out the week of January 7 to roughly 1,000 borrowers, with volume increasing monthly. About 5.5 million borrowers nationwide are in default, meaning more than 270 days past due. The DC Department of Insurance, Securities and Banking published a consumer advisory on the restart in January. Sources: NPR, DC DISB advisory.
The unsettling part for many DC borrowers: this garnishment never goes through a courtroom.
Administrative garnishment skips the courthouse
A private creditor who wants your wages must sue you in DC Superior Court, win a judgment, and obtain a writ of attachment. The federal government does not. Under 20 U.S.C. 1095a, the Department of Education can order your employer to withhold pay through administrative wage garnishment after written notice, no lawsuit required.
| Feature | Private creditor in DC | Defaulted federal student loan |
|---|---|---|
| Court judgment required | Yes | No |
| Notice before garnishment | Summons and suit, then writ | 30-day written notice |
| Maximum withholding | 25% of disposable wages above a protected floor | 15% of disposable pay |
| Protected floor | First 40 times the DC minimum wage per week is fully exempt | 30 times the federal minimum wage per week |
| Where to fight it | DC Superior Court | Administrative hearing request |
DC's judgment-garnishment floor is generous. Under DC Code 16-572, disposable wages up to 40 times the DC minimum hourly wage per week are fully exempt, and only 25% of the excess can be taken. With the DC minimum wage at $18.40 as of July 1, 2026, that protects the first $736 per week from judgment creditors. Federal administrative garnishment does not use the DC floor, which is one reason a federal loan default can bite harder than a private judgment.
The government can also reach money DC courts cannot
Beyond wages, the Treasury Offset Program lets the government intercept federal tax refunds and a portion of Social Security benefits to collect defaulted student loans. Social Security offsets are capped at 15% of the monthly benefit, and the first $750 per month is protected.
Your rights before the garnishment starts
The 30-day notice is not a formality. Before withholding begins, a borrower can:
- request a hearing on the existence, amount, or enforceability of the debt;
- object that the garnishment would cause financial hardship;
- assert that they were involuntarily separated from employment and have been re-employed for less than 12 months, which bars garnishment;
- verify the loan is actually theirs, since servicing transfers produce errors.
A timely hearing request made within the deadline in the notice generally pauses garnishment until a decision issues.
Three ways out of default
| Option | How it works | Effect |
|---|---|---|
| Rehabilitation | Nine agreed monthly payments over ten months | Default removed, garnishment stops, one-time remedy |
| Consolidation | New Direct Consolidation Loan with income-driven repayment | Faster exit, default noted in history |
| Payment in full | Lump sum of balance and interest | Rarely realistic for most borrowers |
Rehabilitation payments are set from your actual income and can be modest. For a borrower already being garnished at 15%, rehabilitation is usually the pressure-release valve, because a completed rehabilitation ends the garnishment and restores eligibility for normal repayment plans.
Where bankruptcy fits
Bankruptcy does not automatically erase student loans; discharge requires proving undue hardship in an adversary proceeding. But filing a case does trigger the automatic stay, which stops an administrative wage garnishment while the case is pending, and a Chapter 13 plan can stabilize a budget being squeezed from several directions at once. For some DC borrowers the right move is administrative, for others it is a bankruptcy filing, and the choice depends on the whole debt picture, not just the student loan.
If your pay is being garnished, or you received a 30-day notice, you can start a confidential garnishment case review here or call 202-417-8128.