Urgent: Wage Garnishment for Defaulted Student Loans Starts January
UPDATE: The U.S. Education Department has just announced that starting in January 2024, it will begin garnishing wages of approximately 1,000 student loan borrowers who are currently in default. This urgent development signals a significant escalation in efforts to recover unpaid student loans.
Beginning the first full week of January, affected borrowers can expect to receive notices about wage garnishment, which could commence as early as 30 days after notification. The garnishment process allows the federal government to seize up to 15% of disposable wages without the need for court proceedings, according to the Education Department’s Federal Student Aid office.
Persis Yu, deputy executive director of the advocacy group Protect Borrowers, condemned the decision, calling it “cruel, unnecessary, and irresponsible.” She emphasized that millions of borrowers are on the brink of default, suggesting that the administration should focus on ensuring affordable loan payments rather than pursuing aggressive debt collection tactics.
The Education Department notes that collection activities will only begin after borrowers have been adequately informed and given the chance to repay their loans. Officials have resumed collection efforts for defaulted federal student loans since May 2023, following a pause that was initiated during the early stages of the COVID-19 pandemic.
Under current regulations, borrowers facing wage garnishment are entitled to receive detailed notices about the intention to garnish their wages, including the nature and total amount of their debt. They also have the right to inspect records related to their debts and may object to garnishment or opt for voluntary repayments to avoid this drastic measure.
As this situation develops, borrowers should remain vigilant and responsive to any communications from the Education Department. The implications of this policy change are profound, potentially affecting thousands of individuals who are struggling to manage their student loan debts.
Stay tuned for further updates as the Education Department prepares to send out the initial notices in less than a month.
