After years of pauses and temporary shelter-ins, student loan collections are set to resume in a very real way. Federal officials confirmed this week that garnishment of wages for defaulting borrowers will resume in early 2026 — a shift that could immediately affect millions of workers.
Meanwhile, FAFSA completion numbers are rising, calls for stronger financial education are getting louder, and one student’s accelerated trajectory highlights how time, not just tuition, pays for college.
Here’s a quick look at the most important stories shaping higher education and student finances this week on December 26, 2025.
🎓 Top headlines at a glance
- Wage garnishment for delinquent student loans will resume in 2026.
- FAFSA applications are up for the 2026-27 aid year.
- Momentum is growing for stronger personal finance education in schools.
- Fast Track to College shows how families can significantly reduce college costs.
1. Wage garnishment for delinquent student loan proceeds in 2026
the The US Department of Education confirmed Wage garnishment will resume in early 2026 for borrowers who remain in default on federal student loans. The notices are expected to start going out in January, with a hold that allows the federal government to withhold up to 15% of available wages without a court order.
It’s also important to note that tax refund offsets are being appealed – so the government will take your tax refund for your defaulted student loans.
This represents a return to pre-pandemic collection practices after several years of pauses associated with emergency relief and resumption of payments.
➡️ impact: For borrowers already facing higher monthly payments or income instability, garnishment can quickly reduce their take-home pay. Those in default still have options to stop wage forfeitures — including rehabilitation or consolidation — but timing is critical now.
2. FAFSA applications have reached a milestone for 2026-2027
the The Ministry of Education announced More than 5 million FAFSA forms have already been filed for the 2026-27 school year, a significant increase from the same point last year.
Officials say the rise reflects smoother processing and improved awareness after recent FAFSA disruptions. High application rates can affect how quickly colleges issue offers of aid and how competitive certain enrollment courses are.
➡️ impact: Filing earlier for the FAFSA can improve access to limited aid such as government grants, campus-based funds, and need-based scholarships. Families who wait may still qualify for federal assistance, but may miss out on other support.
3. The pressure to teach personal finance early is mounting
A A growing chorus of educators and policy advocates calls for Stronger education in personal finance In middle and high schools. 28 states currently have some type of high school requirement, but more needs to be done.
The argument: Students are being asked to make complex decisions about college costs, loans, and repayment with little formal preparation.
Proponents say early exposure to the concepts of budgeting, credit and borrowing can help young people avoid costly mistakes once they reach college age.
➡️ impact: College-related financial decisions often carry consequences that last for decades. Better preparation before enrollment can reduce excessive borrowing and improve long-term outcomes.
4. Accelerated university pathway highlights cost-saving alternatives
A The Wisconsin State student made headlines this week After completing your bachelor’s degree Just six months after graduating from high schoolusing a combination of dual enrollment and accelerated coursework.
By finishing early, the student avoided years of tuition, fees, housing, and living costs – saving tens of thousands of dollars compared to the traditional four-year path.
➡️ impact: College cost conversations often focus on tuition and fees, however Time to the point It remains one of the biggest drivers of total expenses. Dual enrollment, transfer credit, and accelerated programs can significantly reduce debt and out-of-pocket costs.
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