Some Texas students may see their wages garnished as the federal government resumes aggressively collecting student loan payments. Prior to 2020, federal wage garnishments were rising for students who fell behind in their payments, but they were suspended during the pandemic. Now, they're back, and students who have fallen behind may soon see up to 15% of their paycheck withheld.
The student loan debt in Texas is significant, with 3.9 million Texans owing about $131.9 billion in federal student loans. A federal student loan goes into default after nine months with no payment, and the government has the legal right to ask an employer to withhold part of a paycheck. Those affected will receive a letter, but they only have 30 days to react.
If a student receives a letter, they can dispute the amount, ask for a hearing, request documentation, or start a payment plan to avoid losing money. The government offers two plans to help avoid garnishment: Loan Rehabilitation, which sets up a payment plan to get the account current, and Loan consolidation, which absorbs the current loan and makes the account current. Students unsure of their loan status can visit studentaid.gov to see their options.