Feds will soon garnish wages for thousands of Californians. What you should know

Californians who’ve been struggling to keep up with their student loans could see a major change in the next month.

The Trump administration is bringing back wage garnishments for borrowers in default, which means part of your paycheck can be taken before it reaches your hands. Garnishments were paused during the pandemic.

California has the largest student borrower population in the country. According to Education Data Initiative, Californians owe about $151.5 billion in federal student loans, carried by roughly 3.95 million people.

Borrowers will get a notice before anything is withheld, but the timeline to respond is short.

How does the wage garnishment process work?

A federal student loan goes into default after nine months with no payment.

Once that happens, the entire loan becomes due immediately, and the government has the legal right to ask your employer to withhold part of your paycheck.

Before anything is taken out, the U.S. Department of Education must send a written notice at least 30 days in advance. That letter will explain the debt, the amount it plans to withhold, and how you can respond.

Employers can withhold up to 15% of a borrower’s disposable income, according to federal rules.

Notices are expected to go out starting the week of Jan. 7, so borrowers in default may hear something soon.

How educated are people across California?

College completion plays a major role in whether borrowers are able to repay their loans.

In Sacramento County, about 33.3% of adults 25 and older have a bachelor’s degree or higher, according to the U.S. Census Bureau.

In Stanislaus County, the number is about 19.1%. It’s about 23.9% in Fresno County, 14.8% in Merced County and 38.2% in San Luis Obispo County.

Borrowers who leave college without finishing often struggle the most with loan repayments.

Which California colleges have the highest default rates?

According to federal cohort data summarized by CollegeRaptor, Solano Community College in Fairfield has one of the higher default rates in California at about 28.2%. Bakersfield College follows with a rate of about 19.5%.

The data shows the percentage of graduates who default on federal loans within two years of leaving school.

What should I do if I’m at risk of wage garnishment?

If you receive a garnishment notice, don’t ignore it. That notice is your chance to dispute the debt or get into a plan that stops the garnishment before it begins.

Borrowers can ask for a hearing, request their loan records, or start a voluntary repayment plan with their servicer.

The government also offers two ways to get a loan out of default.

One option is loan rehabilitation, which lets you make a series of agreed upon payments to restore the loan to good standing. Another option is loan consolidation, which rolls your overdue loan into a new one that’s considered current.

Either path can stop wage withholding once you begin the process.

Where can I get help if I’m struggling with loans?

Borrowers can log into StudentAid.gov to check their loan status and see repayment or consolidation options.

Sacramento has a financial empowerment center that offer free or low-cost counseling for residents dealing with debt or credit issues.

These services can help you understand your options, catch errors in your loan records, or find a repayment plan that fits your income.

If you’re unsure whether you’re in default, the safest step is to contact your loan servicer as soon as possible.

This story was originally published January 8, 2026 at 9:26 AM.