PHOENIX (AZFamily) — The Trump administration will start sending wage garnishment notices to some student loan borrowers starting next week, targeting an estimated 1,000 borrowers initially.
The notices will go to borrowers in default on their student loans, with the number expected to increase monthly. Under federal law, the government can garnish up to 15% of a borrower’s paycheck.
The Department of Education said it will begin involuntary collection only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans.
Expert warns borrowers to act quickly
Jack Wallace, director of government and lender relations with YRefy, said borrowers in default need to take immediate action.
“So the bottom line here is to don’t put your head in the sand, let’s be proactive, and let’s, you know, start the new year off right by getting out of default and getting out of delinquency, depending upon what category that you’re in,” Wallace said.
Wallace said 5.5 million people are currently in default on their student loans, representing $140 billion in debt.
Options for borrowers facing garnishment
Borrowers who receive garnishment notices have up to 30 days to respond and discuss options with the Department of Education.
“Now, if you’re in default, you need to go to myeddebt.ed.gov, not .com, and talk to those guys about getting out of default,” Wallace said. “And if you’re in default there, if you get one of those letters, you’ve got up to 30 days, and not 31, but up to 30 days to call them up and say, hey, you know, let’s talk about this and let’s get me out of this default situation.”
Wallace said the government offers a loan rehabilitation program that can help get student loans back to their current status. In addition to wage garnishment, the government can also seize tax returns from borrowers in default.
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