MN Student Loan Borrowers Could See Their Wages Garnished In 2026: What To Know

Minnesota student loan borrowers who are in default may see their wages garnished early next year, according to federal authorities.

President Donald Trump’s administration said Tuesday it will send notices to about 1,000 borrowers the week of Jan. 7, with more to come at an increasing scale each month.

Millions of borrowers are considered in default, meaning they are 270 days past due on their payments. The education department must give borrowers 30 days' notice before their wages can be garnished.

Minnesota residents have $26.9 billion in student loan debt, according to the Education Data Initiative.

A total of 787,400 student borrowers live in Minnesota, with 13.6 percent of state residents having student loan debt, according to the initiative, which reported that nearly half of the state's student borrowers are 35 or older.

The average Minnesota student loan debt holder owes $34,163, according to the initiative.

The education department said it will begin collection activities, “only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.”

In May, the Trump administration ended the coronavirus pandemic-era pause on student loan payments, beginning to collect on defaulted debt by withholding tax refunds and other federal payments to borrowers.

The move ended a period of leniency for student loan borrowers. Payments restarted in October of 2023, but former president Joe Biden's administration extended a grace period of one year. Since March 2020, no federal student loans had been referred for collection, including those in default, until the Trump administration's changes earlier this year.

Persis Yu, deputy executive director for the Student Borrower Protection Center, criticized the decision to begin garnishing wages and said the department had failed to sufficiently help borrowers find affordable payment options.

“At a time when families across the country are struggling with stagnant wages and an affordability crisis, this administration’s decision to garnish wages from defaulted student loan borrowers is cruel, unnecessary, and irresponsible," Yu said in a statement.

The Associated Press contributed to this story.