CHICAGO–Almost two-million student loan borrowers could have their wages garnished beginning this summer, according to a new report.

The forecast, from TransUnion, has found approximately six-million student-loan borrowers are 90 days or more past due after a pandemic-era reprieve ended. TransUnion is now estimating that approximately one-third of those borrowers could move into default in July and start having their pay docked by the government. 

That’s up from the 1.2 million that TransUnion had estimated in early May, as the CU Daily reported earlier.

In addition, another one-million borrowers are on track to default by August, followed by another two million in September, TransUnion added. The company defines borrowers as being in default when they are 270 days past due.  

As the CU Daily also reported, in May the Education Department began collections on student loans, which it had not done since prior to the pandemic, with notices informing borrowers their tax refunds and federal benefits could be withheld starting in June if they don’t resume payments. 

Up to 15% of Wages

As TransUnion noted, wage garnishment is also set to restart this summer. Until past due payments are paid in full or the default status is resolved, borrowers could see up to 15% of their wages automatically deducted from their paychecks.   

According to TransUnion, borrowers who have been newly reported as delinquent since then on their student loans have seen an average 60-point decline in their credit scores.  Nine percent of borrowers who fell into delinquency were current on their payments by April, according to TransUnion.  

The Education Department said that overall approximately 43-million borrowers owe more than $1.6 trillion in student-loan debt.