Tamike Miller is already working two jobs, watching prices climb while her paycheck stays the same. Now she’s bracing for another blow: the restart of federal student loan collections that could reduce her wages in the months ahead.
“I need every penny of my paycheck,” said Miller, who struggles to cover basic expenses. “The economy is so expensive, and my wages aren’t covering it.”
The U.S. Department of Education began sending default notices Jan. 7, a first step toward wage garnishment for borrowers who do not set up repayment plans.
Miller said a garnishment could force her to take on a third job — a reality she fears would come at the expense of her mental and physical health.
“We’re trying to better ourselves,” she said. “Why should we have to pay for our education?”
Miller is among millions of borrowers now facing renewed collection pressure. More than 5 million student loan borrowers nationwide — including thousands in Missouri — could see their paychecks reduced through wage garnishment as the Education Department ramps up collections on defaulted federal student loans this year.
The move marks a return to aggressive collections after a yearslong pause that began during the COVID-19 pandemic, at a time when repayment options and forgiveness efforts remain in flux.
Borrowers are considered in default after going at least 270 days without making a payment — a threshold millions have crossed amid shifting policies, legal challenges and rising costs of living. More than 40 million Americans carry student loan debt — roughly one in eight people nationwide — and about 5 million are currently in default.
Under the federal collections process, borrowers in default generally receive at least 30 days’ notice before wages can be withheld. Those who do not arrange repayment may see up to 15% of their wages garnished until the debt is satisfied.
For Miller, the policy shift feels especially punitive.
“It’s outrageous,” she said. “It’s already hard for people to make a living, and now it’s even harder.”
She argued that education should be publicly funded, as it is in other countries, rather than saddling borrowers with long-term debt for trying to improve their lives.
Beyond finances, Miller worries about the broader toll on borrowers. Working additional hours to offset garnishment, she said, could erode already fragile stability. “This could really impact people’s well-being,” she said. “It’s just unfair.”
Black borrowers expected to face heavier impact
Advocates and analysts say the return to aggressive collections is likely to hit Black borrowers especially hard because Black students borrow at higher rates and tend to carry higher balances after leaving school.
Brookings Institution research has found that four years after graduation, the average Black graduate owes nearly $25,000 more than the average white graduate. Analysts say that gap, combined with interest, can make it harder to keep loans in good standing and can deepen inequality over time.
That dynamic, Brookings analysts have argued, reinforces the racial wealth gap by making it more difficult for Black borrowers to build savings, purchase homes or invest in long-term financial stability.
Anxiety spreads beyond those already in default
Even borrowers who are current on their payments say the renewed threat of garnishment and the narrowing of repayment options has created widespread anxiety.
Meakailyn Phillips, who works at a marketing agency in the pharmaceutical industry, resumed paying her loans in the summer of 2023 and has remained in good standing. Still, she said wage garnishment would strain her budget.
“It would make things very difficult,” Phillips said. While her minimum payment is manageable for now, she said service-based and adjacent industries often leave little room for unexpected deductions. “A lot of people don’t make as much as they should,” she said. “There should be some kind of break — like lower interest rates.”
Phillips, who holds a degree in psychology with a focus on human development, said recent policy changes have reshaped her long-term plans. She once hoped to return to graduate school but is now reconsidering due to new limits on federal borrowing. “I want to go back to school,” she said, “but with the cap on borrowing, I’m not sure it’s realistic.”
Repayment programs in flux
The resumption of garnishment comes amid broader upheaval in federal student loan policy. Efforts by the Biden administration to enact widespread loan forgiveness were repeatedly blocked by the courts, leaving millions of borrowers without lasting relief.
In early December, the Education Department announced a proposed settlement that would effectively end the SAVE plan — a Biden-era repayment option that offered payments as low as $0 for low-income borrowers and accelerated forgiveness.
Legal challenges left SAVE borrowers in limbo for months, during which payments were paused, though interest resumed accruing in August.
Additional changes are on the horizon. Under the One Big Beautiful Bill Act, Congressional Republicans moved to phase out two long-standing income-driven repayment plans — Income-Contingent Repayment and Pay As You Earn — both of which will end by mid-2028. In their place, lawmakers created a new Repayment Assistance Plan, or RAP, which bases payments largely on adjusted gross income and waives remaining interest after each payment to prevent balances from growing for borrowers who stay current.
Still, data suggests millions of borrowers are already struggling to keep up. As wage garnishment resumes and repayment options narrow, the question facing the Trump administration and Congressional Republicans heading into 2026 is whether these changes will help borrowers regain stability — or push even more into default.
What borrowers can do
Federal officials encourage borrowers who have fallen behind to contact their loan servicer as soon as possible to explore repayment options, including consolidation or enrollment in an income-driven plan if eligible. Borrowers can also use the free loan repayment simulator on studentaid.gov to compare options and estimate monthly payments.
Word in Black reporter Shernay Williams contributed to this report.