Nonprofit MMI Urges Borrowers to Act as Student Loan Wage Garnishment Is Set to Resume this Summer
“The good news is that default isn’t a dead end. There are still ways to get out of default and avoid wage garnishment, but timing matters.” Amy Lins - MMI Vice President of Customer Success
STAFFORD, Texas, Feb. 02, 2026 (GLOBE NEWSWIRE) -- As the U.S. Department of Education is set to resume wage garnishment for borrowers in default, Money Management International (MMI) is urging consumers to act quickly to avoid one of the most serious consequences of student loan default.
“Defaulting on a federal student loan comes with some pretty steep penalties - accelerated interest and fees, negative credit reporting, potential for a lowered credit score, and the real possibility of wage garnishment and treasury offset,” said Amy Lins, Vice President of Customer Success at MMI.
Federal student loans enter default after 270 days without payment. Following the expiration of pandemic-era payment pauses, many borrowers who did not resume payments may now be reaching or have already crossed that threshold, placing them at risk of wage garnishment as soon as this summer.
“The good news is that default isn’t a dead end,” Lins said. “There are still ways to get out of default and avoid wage garnishment, but timing matters.”
Borrowers generally have two primary options to exit default: loan consolidation, which removes borrowers from default immediately but leaves the default on their credit report, or loan rehabilitation, a longer process that can remove the default from the credit report once completed.
“It is important to contact your servicer to request loan rehabilitation or consolidation as soon as possible,” Lins said. “Working out a plan for your default can avoid wage garnishment.”
MMI notes that student loan distress usually coincides with other household debt pressures.
“If you’re struggling to make your student loan payments because other debts are consuming your budget, working with a credit counseling agency like MMI to access our debt repayment solutions can help,” Lins said. “Getting unsecured debt under control can make room to resume timely student loan payments and reduce overall financial stress.”
About Money Management International (MMI)
For over 65 years, Money Management International (MMI) has been at the forefront of financial health solutions, helping individuals and families break free from debt and build a secure financial future. As a trusted nonprofit leader, MMI is dedicated to transforming how Americans navigate financial challenges by providing expert guidance, innovative programs, and culturally relevant financial education. Recognized by major financial institutions and media outlets, MMI’s award-winning services support long-term financial stability and success. Learn more at MoneyManagement.org.
For reporters looking to interview people who have overcome debt, MMI supports a network of more than 500 peer advocates in all 50 states who have volunteered to share their experiences with the media in the hopes of inspiring others faced with financial challenges. Collectively, these advocates have paid off more than $22 million in debt and now serve as MMI ambassadors. Their stories are featured on MMI’s podcast, Long Story $hort.
Media Contacts
Thomas Nitzsche, Vice President of Public Relations
404.490.2227
Thomas.Nitzsche@MoneyManagement.org
Jackie Callaway
813-610-8241
Jackie.Callaway@moneymanagement.org
Thomas Nitzsche Money Management International 404.490.2227 Thomas.Nitzsche@MoneyManagement.org Jackie Callaway Money Management International 813.610.8241 Jackie.Callaway@MoneyManagement.org
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