NORFOLK, Va. — The Department of Education has started sending notices to borrowers who have defaulted on their student loans, affecting millions of Americans carrying debt from the nation's $1.67 trillion student loan crisis.
More than 45 million people have outstanding student loans.
"What the government is doing is they're saying, hey you owe us a bunch of money, we're gonna take some money back from you - how? we're gonna garnish your wages," Jill Schlesinger, a CBS News business analyst.
Wage garnishment could mean up to 15% of your paycheck taken away or even part of your tax return seized by the government.
If you receive a default notice, financial experts recommend taking immediate action. You should reach out to your loan servicer right away to get your loans out of default status.
You could possibly avoid wage garnishing if you set up a payment plan and make a payment immediately.
If you aren't able to make a payment right away, financial experts say you can negotiate a payment plan option. As long as you make consecutive payments over a period of time, wage garnishment will eventually stop.
Another option involves requesting a hearing to object to wage garnishment. Valid reasons include financial hardship or being employed less than 12 months after being let go from a job.
You must request the hearing by mail within 30 days after receiving the wage garnishment notice.
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