Education Department Pauses Wage Garnishment for Defaulted Student Loan Borrowers
Defaulted student loan borrowers may not see their paychecks reduced at the moment, as Education Secretary Linda McMahon announced a pause on wage garnishment for such borrowers. The Department of Education had planned to start sending wage garnishment notices to defaulted borrowers but has now put that on hold. This pause comes after the department resumed collections on defaulted student loans in May, following a five-year hiatus. Defaulting on student loans can lead to various consequences, including wage garnishment and seizure of federal benefits like Social Security and tax refunds. Advocacy groups have expressed concerns about the impact of wage garnishment on borrowers' financial well-being.