Debt & Savings
Student Loan Borrowers Face Wage Garnishment as Defaults Surge
The federal government is restarting ‘involuntary collections’ on education debt after more than five years.
Students on a university campus in Columbia, Missouri.
Photographer: Michael B. Thomas/Getty ImagesThis article is for subscribers only.
The US Department of Education is restarting collections on defaulted student loans after more than five years, formally ending an era of leniency as US consumers navigate tariff-driven economic uncertainty.
Wage garnishment for borrowers who are not making payments will begin “later this summer,” with the government estimating nearly 25% of its $1.6 trillion student loan portfolio could be in default as overdue payments pile up, the Education Department said in a statement.