The U.S. Department of Education will delay involuntary collections on unpaid federal student loans, according to a Jan. 16 news release.

The department previously announced it would begin collections on defaulted federal student loans, or loans with no payments for 270 days, in April 2025, and was scheduled to start in early January. The Administrative Wage Garnishment program allows the department to order employers to withhold up to 15% of an employee’s income to repay defaulted loans. The Treasury Offset Program can also withhold federal payments, such as federal tax refunds or social security payments, to collect the debt.

The department said in the news release that the delay will allow the student loan repayment reforms under the Working Families Tax Cuts Act, also known as the One Big Beautiful Bill Act, to take effect. The law, which President Donald Trump signed last July, reduced the number of student loan repayment plans to reduce confusion, according to the department. 

“The Department determined that involuntary collection efforts such as Administrative Wage Garnishment and the Treasury Offset Program will function more efficiently and fairly after the Trump Administration implements significant improvements to our broken student loan system,” said Nicholas Kent, Under Secretary of Education, in the news release.

Protect Borrowers, the American Federation of Teachers, the NAACP and other organizations sent a letter to Linda McMahon, Secretary of the Department of Education, on Jan. 7, urging the department to halt its plan to collect on these defaulted loans.

“The decision to resume wage garnishment against millions of borrowers amidst a growing affordability crisis crushing working families is calloused and unnecessary,” the letter wrote. 

Khandice Lofton, a counsel for Protect Borrowers, an advocacy organization to support debt holders, said she was relieved when she heard about the department’s announcement to delay the collections. 

“This is something that’s scary for many student loan borrowers,” said Lofton. “Knowing that this would be paused just really lifted the weight off of millions that could have been affected by it.”

These programs would have been a burden on student borrowers and disproportionately harm low-income households, Lofton said.

“It would harm the most vulnerable borrowers and communities in our country, and the most hardworking,” Lofton said. “Low-income households often have the highest default rate, so you’re going to garnish wages from people who already are not making enough to afford day-to-day living.”

Lofton said this is only a delay, not the end of these programs, so she cannot be certain what the department will do next. She said student borrowers should protect themselves with online resources to get out of default and prevent wage garnishment. 

“Take action. If you are unable to afford your payments, reach out to your servicer and let them know your situation,” said Lofton. “Try calling, try the online chat methods, whatever you can do … definitely take action.”