Will your wages be garnished for student loans? These borrowers won't be affected as collections resume

After a five-year pause prompted by the COVID-19 pandemic, the federal government has resumed debt collection efforts on defaulted student loans.

As of May 5, millions of borrowers with federal loans in default now face the return of aggressive collection tactics, including wage garnishment, seizure of tax refunds, and withholding of federal benefits like Social Security. The move is part of broader efforts by the Trump istration to overhaul the student loan system and roll back more lenient policies introduced during the Biden era.

Who's at risk, and who's not as collections restart

This change is expected to hit hard: nearly 16% of federal student loan borrowers are already past due, and that number may climb as enforcement ramps up.

However, it's important to note that not all borrowers will be affected equally, and some won't be affected at all.

If you have a private student loan, these changes don't apply to you.

Unlike federal loans, private loans have already continued collection activities during the pandemic pause.

Private lenders tend to act faster and more aggressively when payments are missed, often reporting to credit bureaus within 30 days and pursuing lawsuits to recover debts.

So while federal borrowers are just now feeling the renewed pressure, private loan borrowers have faced consequences all along.

For federal borrowers, wage garnishment and other forms of forced collection only apply if your loan is in default, which happens after 270 days of nonpayment. If you're not in default, the resumed collections won't affect you, but staying current remains crucial.

Those in default will see enforcement return through programs like the Treasury Offset Program and istrative wage garnishment, both of which can take a serious toll on your finances.

Fortunately, there are ways out of default.

Borrowers can rehabilitate their loans by making nine on-time, voluntary payments over ten months.

Alternatively, loan consolidation may bring a loan out of default, though it may reset progress toward forgiveness.

Taking action now, by ing your servicer, enrolling in an income-driven repayment plan, or exploring rehabilitation, can help you avoid wage garnishment and regain access to critical borrower protections like deferment and forbearance.

If you're unsure of your loan status, check with your servicer or visit the Federal Student Aid website.

Those who do nothing risk serious consequences this summer, as collections escalate.

The best step forward is to get informed, and act before the government acts for you.