Feds will start garnishing wages for thousands of NC borrowers this month
North Carolinians who’ve fallen behind on their student loans may soon feel the impact in their paychecks.
The Trump administration is restarting wage garnishments for borrowers in default, allowing the government to take a portion of wages before they’re paid. Those collections were paused during the pandemic.
According to SmartAsset, about 1.37 million North Carolinians hold federal student loan debt, together owing roughly $53.3 billion in outstanding loans — an average of about $38,800 per borrower.
With numbers this high, many families in North Carolina could see an impact once garnishments begin.
Here’s what you need to know.
How does the wage garnishment process work?
If you stop making payments on a federal student loan for about nine months, it’s considered in default. At that point, the full balance becomes due, and the government can legally tell your employer to start taking money out of your paycheck.
Before that happens, though, you’ll get a letter from the Department of Education at least 30 days in advance. It lays out what you owe, how much could be withheld and any options you have to respond or avoid garnishment.
Under federal rules, employers can take up to 15% of your disposable income. Notices began going out the week of Jan. 7, and other borrowers already in default could be hearing from the government soon.
What should I do if I’m at risk of wage garnishment?
If you receive a garnishment notice, don’t ignore it.
That letter is your chance to act before anything comes out of your paycheck. It gives you the opportunity to dispute the debt or get into a plan that can stop garnishment before it begins.
Borrowers can request a hearing, ask for their loan records or start a voluntary repayment plan with their loan servicer.
The government also offers two main ways to get a loan out of default: loan rehabilitation, which allows you to make a series of agreed-upon payments to bring the loan back into good standing, and 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.
North Carolina also offers resources for people struggling with student loan payments:
- North Carolina Loan Repayment Program: Offers loan repayment awards for qualifying healthcare providers serving in underserved areas. Up to $100,000 for physicians and dentists, and up to $60,000 for other eligible providers.
- North Carolina State Loan Repayment Program: Incentive payments to help repay loans for mental health and behavioral health providers in high-need areas.
- Licensed Workforce Loan Repayment Program: Up to $50,000 in repayment for licensed professionals working in rural and underserved communities.
- NC Legal Education Assistance Foundation: Provides loan repayment assistance for attorneys in public service careers.
- North Carolina State Education Assistance Authority: Helps administer state-funded loans, forgiveness programs and tools to manage repayment options.
- Forgivable Education Loans for Service: Provides loans that can be forgiven when you work in approved critical shortage professions.
Inspired by a story from the Fort Worth Star-Telegram in Texas.
This story was originally published January 12, 2026 at 10:29 AM with the headline "Feds will start garnishing wages for thousands of NC borrowers this month."
