Student Loan Update: Millions of Borrowers to See Debt Change This Month

Millions of student loan holders may see their paychecks garnished to recover their defaulted debts this month.

According to a report by credit bureau TransUnion, some 1 million borrowers will enter default this month—meaning they will become subject to federal collections, as well as dented credit scores and other unwanted elements.

Student loan collections were largely paused beginning in March 2020 due to the COVID-19 pandemic, under the Joe Biden administration. But this has changed under President Donald Trump.

The process of resuming collections began in May, as the Department of Education warned that borrowers who fell behind and failed to take action could face wage garnishment and significant damage to their credit scores...