Crackdown on Student Loan Defaulters to Begin With Benefit Seizure, Then Wage Garnishment

Federal collections have resumed after the pandemic-era freeze. Beginning in June, the government will intercept defaulters’ tax refunds and other payments.

Students walk past a graduation cap and stole at George Washington University in Washington on May 2, 2022. Stefani Reynolds/AFP via Getty Images

The U.S. government will begin seizing federal benefits from 195,000 student loan defaulters in June, with wage garnishment notices set to reach 5.3 million borrowers later this summer, the Education Department announced on May 5, marking the formal restart of involuntary collections after a years-long pause.

The renewed enforcement effort begins with the Treasury Offset Program, which allows the federal government to intercept tax refunds, Social Security checks, and other federal payments to recover unpaid student debt. Borrowers affected by the program began receiving notices on May 5, the department said.