Aggressive Default Collection Tactics

Aggressive default collection tactics make federal student loans uniquely harsh: the government garnishes wages up to 15%, seizes tax refunds averaging $1,400, and takes Social Security without a court order. In 2024, 8 million borrowers had refunds intercepted, while wage garnishment hits 1 in 5 defaulted borrowers—making this practice more punitive than #5's for-profit steering, which at least only targets those who attended specific schools. With no statute of limitations and interest rates reaching 8%, a borrower earning $30,000 can lose $4,500 annually to garnishment, yet the government spends zero on rehabilitation programs.