Overview
- The Treasury Offset Program will withhold tax refunds, federal salaries, and other payments, with wage garnishments starting after a 30-day notice.
- Approximately 5.3 million borrowers are currently in default, with an additional 4 million in late-stage delinquency nearing default status.
- Fewer than 40% of federal student loan borrowers are up to date on payments, raising concerns about widespread financial strain.
- Borrowers in default will receive email notifications urging them to contact the Default Resolution Group to explore repayment plans or loan rehabilitation options.
- Secretary of Education Linda McMahon framed the decision as a return to fiscal responsibility, drawing criticism from advocates who warn of economic hardship for affected borrowers.