More than 5 million borrowers could soon face stiff penalties from the federal government for delinquent student loans, credit reporting agency TransUnion said on Sept. 25.
In light of pending collections actions, which could include wage garnishment and withholding tax refunds and Social Security benefits, borrowers said they would likely prioritize their student loan payments over other credit accounts, a TransUnion survey conducted from December 2024 to June 2025 found. However, without the threat of collection actions, borrowers often said they would continue to prioritize their mortgages, auto loans, and other forms of debt over their student loans.
Involuntary collections by the U.S. Department of Education (DOE) on student loans that are in arrears were set to begin in May, the agency announced in April. Collections had been halted since March 2020 due to the onset of the COVID-19 pandemic and widespread workplace shutdowns….