Summary
Thousands of student loan borrowers in the United States may soon have their wages taken by the government due to missed payments. The Education Department plans to send notices to about 1,000 people in early January, with more notices to follow. Borrowers have been given a 30-day warning before this step is taken.
Key Facts
- About 1,000 student loan borrowers will get notices about wage garnishment starting in early January.
- Borrowers are in default if they have not made payments for 270 days or more.
- The Education Department must give a 30-day notice before garnishing wages.
- Wage garnishment was paused during the pandemic but will resume under the Trump administration.
- Student loan forgiveness under income-driven repayment plans is now taxable, but forgiveness through the Public Service Loan Forgiveness is not.
- In the U.S., around 42.5 million people owe federal student loans, totaling nearly $1.7 trillion.
- The government may also intercept tax refunds and federal payments from borrowers who do not have wages to garnish.
