Story perspectives

U.S. Resumes Wage Garnishment for 10 Million Student Loan Borrowers

4/11/2025

50 6

Summary

Story summary

The U.S. Department of Education will restart wage garnishment for nearly 10 million defaulted federal student loan borrowers.
Up to 15% of wages may be withheld without a court order after a 12-month grace period ending September 2024.
Limited access to affordable repayment options has heightened the risk of default due to legal challenges and policy changes.
Borrowers can prevent garnishment by enrolling in repayment plans or loan rehabilitation upon receiving a notice.
Defaulting can severely impact finances, damaging credit scores and jeopardizing federal aid eligibility.

1 of 1

Story summary

The U.S. Department of Education will restart wage garnishment for nearly 10 million defaulted federal student loan borrowers.
Up to 15% of wages may be withheld without a court order after a 12-month grace period ending September 2024.
Limited access to affordable repayment options has heightened the risk of default due to legal challenges and policy changes.
Borrowers can prevent garnishment by enrolling in repayment plans or loan rehabilitation upon receiving a notice.
Defaulting can severely impact finances, damaging credit scores and jeopardizing federal aid eligibility.