Student loan debts have been a topic of discussion across administrations, but the heat is being turned up lately. President Trump’s “Big Beautiful Bill” includes crackdowns on delinquent student loan payments that could include garnishing wages, property seizure, withholding portions of paychecks from employers, and other major penalties that could begin being enforced as soon as this summer. Many are concerned this could limit affordable options for education among a great swath of the population.
WWL’s Newell Normand spoke to UNO Economics Professor Dr. Ali Bustamante about how these measures could impact student loan borrowers moving forward. “Student borrowers are really facing a cliff they’ve been pushed down as they face these student loan debt payments,” Bustamante told Normand. He emphasized that the looming impacts to credit scores could have a domino effect “Credit scores have dropped by more than 100 points for 2.2 million of these delinquent borrowers and by over 150 points for another million. So, we’re really already seeing the beginning of the fallout for many of these borrowers,” added Bustamante.
There are narrow options when it comes to remediation to prevent collection measures according to Bustamante. “The only real recourse that borrowers have is trying to contact their loan servicer to try to set up a payment plan or create a justification for preventing wage garnishment if it’s due to disability or some other hardship that prevents employment,” he explained to WWL’s Tommy Tucker. Bustamante cautioned that the government can order employers to withhold up to 50% of wages to collect on delinquent student loan debt, so borrowers are urged to create a plan with a specialist if possible.