Wage Garnishment for Student Loans Starts Next Week
Starting next week, the U.S. Department of Education will begin sending wage garnishment notices to select student loan borrowers. This initiative targets around 1,000 borrowers who are currently in default on their student loans. As the program progresses, it is anticipated that the number of affected borrowers will rise monthly.
Understanding Wage Garnishment for Student Loans
Under federal law, the government has the authority to garnish up to 15% of a borrower’s paycheck. This action will only take place after borrowers are given adequate notice and a chance to repay their loans. The urgency for borrowers to act is crucial.
Expert Advice for Borrowers
Jack Wallace, director of government and lender relations at YRefy, urges those in default to take immediate action. He states that approximately 5.5 million individuals are currently in default, accounting for roughly $140 billion in student loan debt. Wallace emphasizes the importance of proactive measures to avoid wage garnishment.
What Borrowers Should Do
- Borrowers receiving garnishment notices have 30 days to respond.
- Engage with the Department of Education to explore repayment options.
- Visit myeddebt.ed.gov for assistance with default status.
If contacted regarding wage garnishment, it’s essential to respond within the designated timeframe. Wallace explains, “If you’re in default, you need to initiate communication promptly to discuss your situation.”
Options Available for Those in Default
The government offers a loan rehabilitation program designed to help borrowers return their loans to good standing. Beyond wage garnishment, borrowers in default may also face the seizure of tax returns.
Staying informed and taking swift action are key steps to address student loan defaults and avoid financial hardships associated with wage garnishment.
