Student loan defaults trigger paycheck garnishment
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The new agreement places tight restrictions on the department’s future ability to pass student loan forgiveness.
Millions of borrowers are considered in default, meaning they are 270 days past due on their payments. The department must give borrowers 30 days notice before their wages can be garnished.
Students in professional programs would be able to borrow $50,000 a year and up to $200,000 in total. Parent borrowers would be limited to borrowing up to $20,000 a year per student, with a total limit of $65,000 in Parent PLUS loans.
Starting the week of Jan. 7, the Education Department will begin sending notices about paycheck deductions to about 1,000 of five million borrowers in default.
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