Millions of student borrowers could begin having their wages garnished as soon as this summer, according to estimates from credit bureau TransUnion.
The company predicts that by August roughly 3 million borrowers could move into default, meaning they’re 270 days past due on payments. At that point, loan holders are at risk of having 15% of their pay docked by the government, with the money going toward the outstanding debt. There has been no clear indication of when wage garnishment will start.
According to TransUnion, another 2 million borrowers are on course to default in September.
A Biden-administration grace period, during which late or missed payments were not counted against credit scores, ended in the fall.
“The most important thing borrowers can do before administrative wage garnishment restarts is to log into studentaid.gov to check whether their federal student loans are in default and take steps now to remove them from default,” said Kyra Taylor, staff attorney at the National Consumer Law Center.
What are your thoughts with all of this?
(Photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images)
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