Texas students who have fallen behind on their federal student loan payments may soon see their wages garnished. The federal government has resumed aggressively collecting student loan payments, which were suspended during the pandemic. In Texas, 3.9 million people owe about $131.9 billion in federal student loans, making it a significant issue in the state.
A federal student loan goes into default after nine months with no payment, at which point the entire loan becomes due immediately. The government can then ask an employer to withhold up to 15% of a person's paycheck. Those affected will receive a letter, which starts going out today, and they have 30 days to react. They can dispute the amount, ask for a hearing, or start their own payment plan to avoid losing money.
To avoid wage garnishments, the government offers two plans: Loan Rehabilitation, which sets up a payment plan to get the account current, and Loan consolidation, which absorbs the current loan into a new one, making the borrower "current." Borrowers can visit studentaid.gov to check their loan status and explore their options.