Overview
- Roughly 1,000 initial wage‑garnishment warning letters were mailed on Jan. 7, with more expected weekly, as federal collections ramp back up after the pandemic pause.
- Borrowers in default can have up to 15% of disposable pay withheld and may lose their entire federal tax refund, including the child tax credit and earned income tax credit.
- The Education Department must provide at least 65 days’ notice before a tax refund or benefit offset, but missed or outdated notices can leave borrowers unaware of the risk.
- Estimates of borrowers in default range widely, from about 5.5 million to roughly 9 million, with some 12 million behind on payments and lower‑income borrowers disproportionately affected.
- To check risk and seek relief, borrowers are urged to review their status at StudentAid.gov, call the Treasury Offset Program at 1-800-304-3107, consider consolidation or rehabilitation to exit default, and file a tax extension if more time is needed.