Millions of student loan borrowers face the possibility of wage garnishment as they struggle to keep up with payments. The Department of Education projects that nearly 10 million borrowers could default on their student loans in the coming months.
Defaulting on a student loan carries serious consequences. One of the most significant is wage garnishment, where the government can legally take a portion of a borrower's paycheck to repay the outstanding debt. This can create significant financial hardship for individuals and families already struggling to make ends meet.
Borrowers facing difficulties with their student loan payments are encouraged to explore alternative repayment options. Income-driven repayment (IDR) plans, for example, base monthly payments on income and family size. These plans can significantly lower monthly payments and prevent borrowers from falling into default. Borrowers can apply for IDR plans through the Department of Education's website or by contacting their loan servicer. Avoiding default is crucial to protecting credit scores and preventing wage garnishment.
Student Loan Defaults Could Lead to Wage Garnishment for Millions
Millions of student loan borrowers are at risk of defaulting on their loans, potentially leading to wage garnishment. The Department of Education estimates that nearly 10 million borrowers could be in default status within a few months. This means the government could start taking money directly from their paychecks to repay the debt. Borrowers struggling to make payments should explore options like income-driven repayment plans to avoid default.
Source: Read the original article at CBS