Collections are coming for millions of student loans in default

A long-postponed reckoning could be coming soon for millions of student loan borrowers who are now faced with garnished wages and seized tax refunds as soon as next year. Since pandemic forbearance finally expired last year, more than 9 million borrowers already are in default, owing a collective $234 billion, and millions more are late in their payments. Those borrowers are likely to face severe collection measures such as wage garnishment and seizure of tax refunds next year. Such collections have been repeatedly paused, most recently this past January. Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, a nonprofit that advises borrowers, schools and employers, said she expects collections to start next year. “It’s heartbreaking,” Mayotte said.

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