With the restart of student loan collections, millions of defaulted borrowers risk garnishment of wages and federal benefits, including Social Security. The Education Department will notify over 5 million borrowers about impending garnishment if payments are not made. While options such as loan consolidation, rehabilitation, and bankruptcy are available to circumvent these penalties, navigating the process can be complicated. Borrowers face added stress after a five-year pause from collections, as many had adjusted their budgets to reflect no repayments during this period.
This summer, millions of defaulted student-loan borrowers could face wage and federal benefits garnishment, but options exist to avoid those consequences.
Collection
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