Student loan borrowers facing wage garnishment notices have options to address default

The Department of Education will begin sending wage garnishment notices to federal borrowers in default, and roughly 9 million borrowers are reported to be in default. Recipients are reported to have 30 days after a notice is sent to bring loans into good standing or request a hearing; consolidation and rehabilitation are described as routes that can remove default status.

Federal student loan borrowers in default are receiving notices that their wages may be withheld. The Department of Education announced it will begin sending those notices to defaulted borrowers. Roughly 9 million borrowers are reported to be in default. The notices give recipients a limited time to respond before garnishments begin. Key facts: - The Department of Education will send wage garnishment notices to federal borrowers whose loans are in default. - About 9 million borrowers are reported to be in default, which is described as missing payments for more than 270 days. - Recipients are reported to have 30 days after a notice is sent to bring loans into good standing or to request a hearing before garnishments begin. - Reported options to reverse default status include loan consolidation (if completed before garnishment begins) and loan rehabilitation (which is described as an option that can remove default status). - A decision about a requested hearing is typically reported to be made within about 60 days after the hearing request is received. Summary: These notices indicate that wage withholdings could begin for affected borrowers and that default status carries immediate consequences for loan balances. Undetermined at this time.