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Will collections garnish wages over student loans?
Posted on 4/22/25 at 7:58 am
Posted on 4/22/25 at 7:58 am
I know nothing about student loans except that a lot of people have been deferring them, hoping for forgiveness, but I am seeing collections on 5.3 seriously delinquent loans are about to start back up after a 4-5 year pause.
Are we about to see 5.3 million people have their wages garnished if they fail to pay or get caught up?
Are we about to see 5.3 million people have their wages garnished if they fail to pay or get caught up?
21
Posted on 4/22/25 at 7:59 am to stout
Yes they will according to a client of mine. They are racking up lates and crushing credit scores
Posted on 4/22/25 at 8:00 am to stout
CBS got your back
This is one of those issues hanging out in the ether that I'm sure Powell is being mindful of. This would be bad for the economy at large.
quote:
The Education Department will soon begin collecting payments for student loans that are in default, including through wage garnishment for potentially millions of borrowers, the department announced Monday.
Beginning May 5, the Education Department will begin involuntary collections through the Treasury Department's offset program, which claws back delinquent debts by withholding payments such as tax refunds, federal salaries and Social Security benefits.
More than 5 million borrowers are in default and 4 million more could be in the same position in a few months, which would put nearly a quarter of the federal student loan portfolio in default, according to the Education Department. Less than 40% of borrowers are current on their student loan payments.
In the next two weeks, those in default will receive emails informing them of the next steps and urging them to look into repayment options. Wage garnishment notices will be sent out later this summer.
This is one of those issues hanging out in the ether that I'm sure Powell is being mindful of. This would be bad for the economy at large.
Posted on 4/22/25 at 8:02 am to SDVTiger
Credit scores in the shitter
Collections on your arse garnishing your wages
Home purchases and/or rent are unaffordable
New cars cost $40K+
Not much to look forward to for the student loan generation
Collections on your arse garnishing your wages
Home purchases and/or rent are unaffordable
New cars cost $40K+
Not much to look forward to for the student loan generation
This post was edited on 4/22/25 at 8:04 am
Posted on 4/22/25 at 8:05 am to SlowFlowPro
quote:
This would be bad for the economy at large.
It could be the first domino that falls and fall quickly considering the volume and how many people have been too comfortable not paying the past 4+ years. No way they have it in their budget suddenly
Posted on 4/22/25 at 8:05 am to stout
quote:
Credit scores in the shitter
Collections on your arse garnishing your wages
Home purchases and/or rent are unaffordable
New cars cost $40K+
Not much to look forward to for the student loan generation
Great post as to why people rushing to lower rates need to chill.
We don't want to replace a needed recession with stagflation
This post was edited on 4/22/25 at 8:07 am
Posted on 4/22/25 at 8:06 am to stout
quote:
No way they have it in their budget suddenly
100% correct.
Posted on 4/22/25 at 8:07 am to stout
I don't think people realize how many people started taking on student loans even more in the last several years because they were certain that Joe Biden was going to end up letting them have them for free. I know one specific person in my own Circle that did this. They took on student loans to go back to school specifically not intending to pay them back and assuming they would end up being forgiven. That's what stupid fricking government policy will get you even when it's not policy yet
Posted on 4/22/25 at 8:07 am to stout
Yes
The only exception is Doctorates in Gender Studies because they have no wages to garnish.
The only exception is Doctorates in Gender Studies because they have no wages to garnish.
Posted on 4/22/25 at 8:07 am to stout
Wife got on the SAVE plan few years ago. Been in interest free forbearance since COVID. No plans for forgiveness, just stashing cash until payments restart.
Posted on 4/22/25 at 8:09 am to stout
quote:
people have been too comfortable not paying the past 4+ years. No way they have it in their budget suddenly
I wish I could just not pay my mortgage. My “budget” would change significantly. These people borrowed money; they have to pay it back.
Posted on 4/22/25 at 8:09 am to Grumpy Nemesis
quote:
That's what stupid fricking government policy will get you even when it's not policy yet
You can blame the Government and Biden, and, I dont think you are 100% wrong to do so, but the real blame lies on people who are bums looking for free shite. We have a whole lot of people in this country who want free stuff and justify by saying "well others are doing it so I might as well too"
I don't feel sorry for anyone who did what you described. They are bums who dug their own hole. Let them climb out of it.
Posted on 4/22/25 at 8:11 am to jcaz
quote:
No plans for forgiveness, just stashing cash until payments restart.
But you were stashing cash instead of paying because you were hoping it would be forgiven, obviously. Otherwise, yall would have been paying it. Being in forbearance didn't mean you couldn't make payments on the principal, IIRC.
Posted on 4/22/25 at 8:14 am to SlowFlowPro
quote:
This is one of those issues hanging out in the ether that I'm sure Powell is being mindful of. This would be bad for the economy at large.
Let’s see. They took the money and agreed to pay it back. I don’t care what it does to the economy in the short term. If we can’t get back to a place where obligations like this actually mean something then we are doomed. No one ever said that fixing this country would be easy.
Posted on 4/22/25 at 8:14 am to stout
quote:
Are we about to see 5.3 million people have their wages garnished if they fail to pay or get caught up?
Today, 42.7 million borrowers owe more than $1.6 trillion in student debt. The number you quote, 5.3 million, have not made a payment in 360 days or longer... They need to have their wages garnished...
Posted on 4/22/25 at 8:15 am to stout
If the rumors that the Biden admin FHA refinanced deliquent mortgages are half true, that is the bigger story. Second half of 2025 is going to be lit for the freeloaders.
Posted on 4/22/25 at 8:15 am to stout
One thing I learned watching lots of content about people in bad credit situations is that if you get an opportunity to not pay a bill for a period of time, it's very likely you adjust your budget entirely based on not paying that bill. That's why even though there was some math that said it was stupid to pay SL during the Covid pause, I still did, I'm relatively disciplined in terms of budget/ spending. Most people should never not pay a routine bill/debt, even if they have a chance to pause payments.
Posted on 4/22/25 at 8:16 am to stout
quote:Yet if you look at the Instagram feeds of the same people crying about student loan forgiveness, you’d think they were doing damn well in life. Always posting pictures from nice restaurants, concerts with expensive tickets, or taking expensive vacations. Sounds like their budgets are just about to get an adjustment in what expenses are higher priorities.
Credit scores in the shitter Collections on your arse garnishing your wages Home purchases and/or rent are unaffordable New cars cost $40K+
Not much to look forward to for the student loan generation
Posted on 4/22/25 at 8:17 am to SloaneRanger
quote:Short term?
Let’s see. They took the money and agreed to pay it back. I don’t care what it does to the economy in the short term.
quote:
No one ever said that fixing this country would be easy.
shite's not that dramatic. Don't try to raise the emotional level of this rational thread, bubba.
Posted on 4/22/25 at 8:17 am to anc
quote:
If the rumors that the Biden admin FHA refinanced deliquent mortgages are half true
It's not a rumor. FHA acknowledged it last week when they ended the program which was a holdover from COVID that Biden admin abused.
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