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• The U.S. Department of Education delayed wage garnishment for people whose student loans are in default. 

• Nearly 125,000 Wisconsinites have student loans that are in default. 

• The Wisconsin Coalition on Student Debt offers a toll-free, confidential helpline at (833) 589-0750 and via email at studentloanquestions@debtsmarts.org.

It’s a tumultuous time for student loan borrowers. 

Following years of waiving payments and penalties after the COVID-19 pandemic, the U.S. Department of Education announced in December it would soon begin garnishing the wages of borrowers who’ve defaulted on their loans. 

Then, Jan. 16, department officials reversed course, saying they would wait to start “involuntary collections” until other changes to the student loan system take effect. They did not specify how long the delay would last.

Another major student loan change is pending court approval. The agreement, which settles a lawsuit brought by the department, would end the popular Biden-era repayment plan Saving on a Valuable Education (SAVE). The plan offered borrowers more flexibility than any other. 

Meanwhile, other changes to borrowing and repayment programs will reduce the options available to current and future students.

More than 720,000 Wisconsinites hold student loans, according to U.S. Department of Education data analyzed by researchers at the Education Data Initiative. Of those, 74,000 were in default as of last September, meaning they hadn’t made a payment in at least 270 days, and the number has likely grown since then. Overall, the state’s borrowers owe around $23.6 billion. What do all these changes mean for them?

“There have been so many announcements … The landscape is going to continue to be really confusing,” said Carole Trone, executive director of the Wisconsin Coalition on Student Debt, which runs a helpline providing free, confidential advice for people who have loans or are considering taking one out. 

“Borrowers often express that they’re confused and overwhelmed,” Trone said. “What our organization is thinking of is how we can reach those borrowers and help them work through their confusion and feel confident with the path forward.”

The helpline received about 160 calls last year, and it can accommodate far more, Trone said. For privacy, staff don’t record any details about the caller or the reason for the person’s call, and they don’t ask for login information for callers’ loan accounts. To reach the helpline toll-free, call (833) 589-0750, or email studentloanquestions@debtsmarts.org. Staffing for the helpline is provided by Ascendium Education Group. Ascendium is a financial supporter of Wisconsin Watch, but is not involved in editorial decisions.

Wisconsin Watch spoke to Trone about what borrowers and prospective borrowers need to know right now. The following interview has been edited for length and clarity.

How does the helpline work and why was it created?

The helpline was originally set up back in the early days of the pandemic … When you call the toll-free helpline, you’re going to talk to a live person. These are trained professionals whose work, day in and day out, is working with student loan borrowers, helping them navigate the complicated process and helping them understand what might be confusing that’s come out in the news or in notices they’ve gotten. 

The helpline is not a replacement for talking to your loan servicer (the company where you send payments) or logging in to your account at studentaid.gov and seeing what loans are recorded there. But what our helpline is designed to provide is a very accessible, no-wait-time forum where you can ask one-on-one, “Hey, I got this notice. What do you think it means?” or “I haven’t been paying. What should I start with doing?”… It’s a really good starting point for anyone.

In 2020, there was this historic payment pause for loans because of the challenges from the pandemic. In Wisconsin, we don’t have a statewide helpline for student loan borrowers. We don’t have an ombudsman, we don’t have a higher ed agency. These are where borrowers in other states can often turn to, so we wanted to be able to provide a resource. 

The Department of Education has threatened to start garnishing wages. What should borrowers in default know?

This option to garnish wages was around last year. What’s new is that they (took) the next step, which is starting to send letters out to affected borrowers. Policy says you’re supposed to have 30 days notice before (garnishment) happens. The other thing they can do is withhold your tax refund if you’re in default or severely delinquent on your loan. 

The other thing that could be almost as damaging is that your credit score is going to be affected. And just to give you a sense of how really devastating this impact could be, if you did a four-year program and you took out loans for each semester, that’s probably eight semesters minimum, so you’ve got eight loan lines. If you are late in paying, that means you’ve got eight nonpayment reports going to the credit agencies. What was happening even last year was that credit reporting had resumed, and people may not have been aware of it until they went to take out a car loan or a mortgage, and they couldn’t because their credit score tanked maybe 100 or more points.

What can borrowers do if they’re in default?

First, we know borrowers are feeling a lot of emotional pain over this. If you’re stressed out, if you’re embarrassed, if you’re overwhelmed, sometimes people just can’t move forward on this. I want to encourage people to call our helpline or email us. That is exactly what we are here for. 

There are ways that you can get out of default that are tied to your income levels … You can start to rehabilitate your loan. You have to request a form from your loan servicer. They’ll need to know your income to be able to set an income-driven repayment amount. And if that amount is too much, you need to let the servicer know that … Based on your income, that mandatory payment can be as low as $10 a month. The point is to show that you are making on-time, monthly payments for nine months, and that will restore your loan. But you need to be serious when you’re doing that. 

What advice do you have for borrowers who are currently signed up for the SAVE repayment plan, which is set to end soon?

If you’re in SAVE, you’re still in what they’re calling “administrative forbearance” because of all this litigation. But as of last August, your loan balance is growing because they resumed collecting interest. If you’re in the SAVE program and you are eligible for Public Service Loan Forgiveness, you should know that while you’re in (administrative forbearance), you’re not making any progress toward the payment count that you need … There will be a timeline for when people have to move out of the SAVE program, and I wouldn’t be surprised if they have that timeline starting as early as summer.

If you’re trying to figure out what you can do, you can call our helpline. There is also a really helpful loan simulator tool on the studentaid.gov website. You can say “My number one priority is to be eligible for Public Service Loan Forgiveness,” or “I want to pay off my loan as fast as possible,” or “I want the lowest possible payment,” and it can give you pretty accurate scenarios of what you can expect your payment amount to be.

Provisions in last year’s One Big Beautiful Bill Act will eliminate some other repayment plans and add some new ones. What should prospective borrowers know?

The goal is to create fewer programs and fewer options.

The goal is to create fewer programs and fewer options. In principle, I think everyone would appreciate more simplicity. What has happened is that all these repayment plans have come out of different administrations and regulatory initiatives. Those are now getting caught up in the courts. One thing to know is that Public Service Loan Forgiveness came through Congress (rather than the regulatory process), and that’s why it’s on much firmer ground. 

There will be basically one income-based repayment plan, called RAP (Repayment Assistance Plan), and there’s the standard repayment plan. It’s not like on July 1 of this year there’s a light switch and everyone is in RAP. Many of those (existing) plans will continue on the terms those borrowers agreed to. It will be new loans that will start to have only those two options.

Starting July 1, there will also be lower limits on how much students and their families can borrow. How do you anticipate that those changes are going to affect students?

We know that in areas like health care or in fields like law, people do (sometimes) borrow more than what these new limits are going to be. And so there’s been a lot of attention now to who’s going to be affected by that. If you’re borrowing more than the $200,000 limit, for instance, to be a medical doctor, what’s that going to mean? … Colleges and professional schools are concerned that people who are currently in their programs will hit the final year or two years of their programs and not be able to borrow the money to complete their programs. 

There is a concern that the contingent of borrowers who don’t have the assets (and) the strong credit ratings to be able to turn to the private loan market won’t have options and therefore won’t pursue these degrees.

What should people know before taking out private student loans?

Private loans have a lot fewer protections than federal loans. They do not have forbearance, so when you take out that loan, repayment pretty much starts as soon as you’ve taken it out. They don’t have income-driven repayment options. If you take out a loan to go to a college and they’ve misrepresented the value of their degrees or what jobs their graduates are getting, there are federal protections that you don’t have with a private loan provider. 

The big thing related to equity is that if you don’t have a high enough credit rating to qualify for the loan, you’ll be denied. And so, in the worst-case scenario, we’re worried that for these high-cost health care degrees, we will see a lot fewer first-generation, lower-income students going into those professions. 

A lot is changing now, but what’s a piece of advice that you’ll keep giving?

I think there is justifiable concern about student loan debt, but we are seeing signs that many more students are hesitating or choosing not to pursue postsecondary education because they figure that’s the only way to avoid student loan debt. The challenge with that approach is that the economic studies say most jobs are going to require some kind of postsecondary credential. So we do want to make sure that students and potential borrowers read up and learn about what their programs are going to cost.

In Wisconsin, the average amount of student loan debt that an undergraduate takes on is about $33,000 for someone who completes their degree. So when you hear the stories of huge amounts of debt, those things happen. It’s heartbreaking to see those stories, but it’s not the norm.

Editor’s note: This story was corrected to reflect that the Wisconsin Coalition on Student Debt helpline received about 160 calls last year.

Natalie Yahr reports on pathways to success statewide for Wisconsin Watch, working in partnership with Open Campus. Email her at nyahr@wisconsinwatch.org.

Student loan borrowers are ‘confused and overwhelmed.’ Here’s what Wisconsinites should know. is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Wisconsinites owe $23.6 billion in student loans, and thousands of Wisconsin borrowers are in default. But Carole Trone, executive director of the Wisconsin Coalition on Student Debt, doesn’t want those kinds of numbers to scare students away from college altogether. 

“I think there is justifiable concern about student loan debt,” said Trone, whose group helps Wisconsinites figure out costs before, during and after college. 

“But we are seeing signs that many more students are hesitating or choosing not to pursue postsecondary education because they figure that’s the only way to avoid student loan debt,” Trone said. The problem with that plan, she said, is that studies suggest most of the jobs of the future will require some sort of credential beyond a high school diploma.

She’d like students to hear a different number: $33,000. “In Wisconsin, the average amount of student loan debt that an undergraduate takes on is about $33,000 for someone who completes their degree. So when you hear the stories of huge amounts of debt, those things happen. It’s heartbreaking to see those stories, but it’s not the norm.”

Trone talked with Wisconsin Watch about what students can do at every step in their education to reduce what they borrow and increase the chance they’ll be able to pay it back.

File your FAFSA 

The Free Application for Federal Student Aid was simplified in 2024, making it easier for students to apply for Pell grants and federal financial aid. 

“It has finally, truly gotten better, easier, simpler — at long last — so it is completely worth it to do it,” said Trone. “It keeps your options open.” 

Forget the ‘dream’ school 

“I caution people about talking about their ‘dream college,’” Trone said. Instead, she urges students to make a list of things like how much they’re willing to pay, what kinds of programs they’re considering and the typical salaries for those professions.

Then, she recommends students use the Department of Education’s College Scorecard website to compare schools.

“Not all programs cost the same, and not all programs are worth the same … You want to look for colleges that have strong graduation rates. You want to see how many students get financial aid. You want to see what the net cost of attendance is,” Trone said. 

Meet with an adviser 

Sometimes students end up paying more for school because the school doesn’t accept their prior credits, or because they need a class that’s seldom offered. 

“If you’re trying to bring credits into that institution, talk to someone about that. Don’t just assume that those credits will transfer,” Trone said. “Try to map out what classes you need to take, and meet with your adviser and figure out when those classes are being offered.”

Limit loans 

When colleges send financial aid offer letters, they list the maximum amount the student can borrow. But students have the option to borrow less or decline loans altogether, and they can make those decisions until around the time they’re enrolling in classes.

“Make sure that you have really thought about do you actually really need to borrow this money, because you’ll be paying it back with interest,” Trone said.

Finish your degree 

Student loans come due whether a student graduates or not. Those who don’t are more than twice as likely to end up in default, according to research by the Pew Charitable Trusts.

“The most important thing that you can do to be able to repay any loans you take out is to finish your program,” Trone said. People leave school for all sorts of reasons, including family commitments and job changes. “A lot of that can be really unavoidable … but those are the borrowers that often have the most difficulty in repaying their loans.”

Update your contact information 

One simple step can help keep borrowers on track: signing into studentaid.gov to update their contact information regularly. 

“After you’ve left college, that’s the time when lots of folks are moving around or changing email addresses,” Trone said. “When things start coming due or there’s changes, they need to be able to reach you.”

Natalie Yahr reports on pathways to success statewide for Wisconsin Watch, working in partnership with Open Campus. Email her at nyahr@wisconsinwatch.org.

6 tips for avoiding student loan default is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.