Student Loan Garnishment Returns in 2025 — Are You at Risk?

Federal student loan collections officially resume on May 5, 2025.

After a five-year pause, millions of borrowers — including nearly 10 million in default — face the risk of:

• Wage garnishment (up to 15%) • Tax refund seizures • Social Security offsets

With 42.7 million Americans carrying $1.6 trillion in student debt, this policy shift affects households nationwide.

This episode explains what is happening and how to protect your income.

What You’ll Learn

• Why federal collections are restarting

• How wage garnishment works

• Who is most at risk

• What does the default status mean?

• Income-Driven Repayment (IDR) options

• Loan rehabilitation strategies

• Consolidation pathways

• How to avoid fina ...