Roughly six million federal student loan borrowers have become newly delinquent, with almost a third at risk of hitting default status next month, which could trigger wage garnishment and other procedures against them, credit reporting agency TransUnion said in a June 24 statement.
There were 5.8 million borrowers with payments being 90 days or more past due as of April, TransUnion said. When payments become 270 days past due, the borrower enters default status. “It is estimated that nearly one-third, approximately 1.8 million, could reach default status in July 2025.”
Once a borrower hits default status, the consequences can be severe.
Their wages may be garnished, according to the Department of Education. “This means your employer may be required to withhold up to 15 percent of your pay and send it to your loan holder to repay your defaulted loan.”…