You're Not Alone—Understanding Student Loan Delinquency & What Comes Next

If you’ve fallen behind on your student loan payments, know that you are not alone. For over three years, federal student loan borrowers weren’t required to make payments due to the COVID-19 pandemic. When payments resumed, the Department of Education provided a temporary “on-ramp” to help borrowers adjust, ensuring loans remained in good standing—even for those who missed payments.

That on-ramp ended in September 2024, and now consequences for falling behind have resumed. Fewer than half of people with federal student loans are actively repaying today! Here’s what happens if payments are missed:

• A loan is considered delinquent when a required payment is late.
• After 90 days past due, negative credit reporting begins.
• At 270 days (about 9 months) past due, the loan defaults.

▶️ If borrowers didn’t restart payments after the pause, their loans could be in default at the end of June. Borrowers that were in default before the pandemic and have not resumed payments, are already in default. 

Consequences of Default

Once a federal student loan is in default, the government can take action to recover the debt, including:

• Tax Refund & Federal Benefit Intercepts. The Department of Education can withhold tax refunds, Social Security benefits, and other federal payments to pay the loan balance. 
• Wage Garnishment. Your employer can be ordered to deduct up to 15% of your disposable wages. Unlike most debts, this type of does not require a court order—the government can initiate it after sending you a notice 30 days prior to its start.

▶️ On May 5, the Education Department will restart involuntary collections, diverting tax refunds and Social Security benefits to pay down student loans in default. Borrowers that are impacted will receive an email with next steps and repayment options.

How to Stop or Avoid Wage Garnishment

If your loan is at risk, taking action now can prevent garnishment before it starts. Options include:

• Set Up a Repayment Plan. Contact the Department of Education's Default Resolution Group (1-800-621-3115) to explore repayment options that fit your budget.
• Request a Loan Rehabilitation Plan.  Make 9 on-time monthly payments to restore the loan to good standing and remove the default from your credit report. Keep in mind, if the garnishment has already started, you will be "double paying" for months. You can request to have garnishment paused only after you make 5 consecutive payments. 
• Consolidate Your Loan. You may be able to consolidate the loan in default to a Direct Consolidation Loan. While the default will remain on your credit report for the original loan, the new loan will be considered to be in good standing. Apply online at studentaid.gov/loan-consolidation.
  

▶️ If you still have time to prevent garnishment, acting quickly is key. Once it begins, reversing it becomes much more difficult. 

How Tuition.io Can Help

If your employer offers Tuition.io as a student loan benefit, you have access to:

• Personalized Repayment Assistance – Find the best option available today for your financial situation.
• Loan Coaches – Get free one-on-one guidance from experts who can help you navigate repayment options and reduce the chance of default.
• Resources & Insights – Stay informed about policy changes, repayment options, and ways to reduce the stress of student loan debt.

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If your employer offers Tuition.io benefits, we encourage you to log in to schedule time with a Student Loan Coach to help you understand the best options for your personal situation.