$176M In Wages Garnished For Unpaid Federal Student Loans In Just Three Months

Ashlee Keiler:

Millions of would-be students turn to the federal government in order finance their education, each taking out thousands of dollars in loans. While that influx of funds allows borrowers to seek a better life by obtaining a degree, it also has to be repaid. And when that becomes impossible for some consumers, debt collectors hired by the Department of Education sometimes resort to garnishing wages.

According to recently released data from the Department of Education, that strategy paid off in the last three months of 2015, with debt collectors bringing in more than $176 million in garnishments [PDF].

Debt collectors, even those working for the federal government, can only garnish a borrower’s wages after they’ve defaulted on their debt — failed to pay for a certain number of months — and received a court order allowing the deductions.