Default Isn’t Just a Word. It’s a Paycheck Hit.

Understanding Student Loan Default

What Does it Mean to Default?

Student loan default occurs when you fail to make payments on your federal student loans for 270 days, roughly nine months. Private loans can default much sooner, depending on the lender's rules. Defaulting can seriously damage your credit, lead to wage garnishment, seizure of tax refunds, and even Social Security benefits in some cases.


History of Student Loans and Default Risks

Student loans started in 1958 with the National Defense Education Act and expanded dramatically with the Higher Education Act of 1965. Over time, laws have tightened, making student debt extremely difficult to discharge in bankruptcy. In 1996, the Debt Collection Improvement Act allowed wage garnishment and tax refund seizure without court orders. After a pause due to COVID-19, repayments resumed in May 2025, causing a surge in defaults.



Who is Most Likely to Default?

Students attending for-profit colleges, those who don't finish their degrees, and borrowers from lower-income backgrounds or minority communities are at higher risk of defaulting.



Consequences of Defaulting

Defaulting can result in severe financial setbacks, including damaged credit scores, wage garnishment (up to 15% of your paycheck), withheld tax refunds, additional legal action, and substantial collection fees.



Resources to Prevent Default

If you are struggling, several resources can help you avoid default:



Already in Default? Here's How to Recover

If you've defaulted on your loans, don't panic. Here’s how to get back on track:

  • Loan Rehabilitation: Complete nine monthly payments to clear your default status.
  • Loan Consolidation: Merge defaulted loans into a new repayment plan to regain eligibility for federal benefits.
  • Reach out to the Default Resolution Group at 1-800-621-3115 for immediate assistance.



Policy Updates and Proposed Changes

Recently, garnishing Social Security benefits has temporarily stopped. New legislative proposals might change loan structures, adjust Pell Grants, eliminate certain subsidized loans, and introduce borrowing caps based on average education costs. Keep updated by following Federal Student Aid news.


Practical Steps to Protect Yourself

  • If you’re struggling now, quickly explore IDR plans or request deferment. Call 1-800-433-3243.
  • If in default, begin rehabilitation or consolidation immediately. Call 1-800-621-3115.
  • Stay proactive by regularly monitoring your loans on Federal Student Aid.



Being proactive can prevent severe consequences and help secure your financial future.

Seeing What is Behind You Matters

June 8, 2025
What is Behind You Speaks Volumes Your Zoom or Teams background is like your outfit, it makes a statement before you even speak. Whether you're in a job interview or a team check-in, people notice what's behind you and it can shape how they see you. Researchers at Durham University found that backgrounds featuring plants or books make people seem more trustworthy and smart, while novelty or living-room scenes make them seem less so. Even a softly blurred background keeps attention on you and boosts your credibility. When you're on a video call for the first time, there’s no handshake and no full body language to read, just your face and your surroundings. That background becomes part of your first impression. It’s not just the space that counts. Small gestures matter too. Smile, sit up straight, and look into the camera. These actions signal that you’re confident, focused, and engaged. Standing up can even make you look more energetic. Remote work specialist Ali Greene stresses that showing up fully matters more than having a perfect background. If you seem distracted or unprepared, even the neatest office won’t help. Her simple advice is to pick a clean quiet spot and bring your full attention to the moment. So next time you log into a meeting, look behind you. That background is part of your message. Make sure it’s saying something good.