Student-loan borrowers behind on payments are getting a major break, the US education secretary says

"Education Sec. Linda McMahon told reporters at a visit to a Rhode Island school earlier this week that wage garnishment for defaulted student-loan borrowers has been put on pause. When asked by a reporter how the garnishment would impact borrowers, McMahon responded: "Well, actually, there is a pause." "We've now collected about $500 million," McMahon said. "The next phase to go into a place was garnishment, and that's been put on pause for a bit.""

"It follows an announcement from the department in December saying that it would begin sending wage garnishment notices to about 1,000 defaulted borrowers in early January, with the intent to increase the scale of those notices each month. In May, the department resumed collections on defaulted student loans after a five-year pause. Defaulting on student loans, which typically happens after 270 days of missed payments, can have significant consequences in addition to wage garnishment, including seizure of federal benefits like Social Security and tax refunds."

Education Secretary Linda McMahon said wage garnishment for defaulted student-loan borrowers has been put on pause and noted the department has collected about $500 million. The department did not make a formal announcement or immediately respond to requests for comment. In December, the department said it would begin sending wage-garnishment notices to about 1,000 defaulted borrowers in early January and planned to scale up notices monthly. Collections on defaulted loans resumed in May after a five-year pause. Defaulting can lead to wage garnishment, seizure of federal benefits, and tax-refund offsets. Advocacy groups warned mass garnishment could push millions further into debt. The timing and duration of the pause remain unclear.

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