Jason Collier, a special education teacher in Virginia, often needs to wait until payday to fill up the gas tank of his car — and in the meantime hopes he doesn’t run out.

“Money is tight when you’re a teacher,” Collier, 46, said.

Now he’s afraid that the U.S. Department of Education will soon garnish up to 15% of his wages because he’s behind on his student debt payments. Collier said he hasn’t been able to meet his monthly bill for years, while juggling the expenses of raising two children and medical expenses from a cancer diagnosis.

If his paycheck is garnished, “it would just be more of a pinch,” Collier said. “If I need a car repair, or something comes up, I might not be able to do those things.”

After a half-decade pause of collection activity on federal student loans, the Trump administration announced on April 21 that it would once again seize defaulted borrowers’ federal tax refunds, paychecks and Social Security benefits.

More than 5 million student loan borrowers are currently in default, and that total could swell to roughly 10 million borrowers within a few months, according to the Education Department.

The Biden administration focused on extending relief measures to struggling borrowers in the wake of the Covid pandemic and helping them to get current. The Trump administration’s aggressive collection activity is a sharp turn away from that strategy.

“Borrowers should pay back the debts they take on,” said U.S. Secretary of Education Linda McMahon in a video posted on X on April 22.

More than 42 million Americans hold student loans, and collectively, outstanding federal education debt exceeds $1.6 trillion. The Education Department can garnish up to 15% of defaulted borrowers’ disposable income and federal benefits, as well as their entire federal tax refunds.

“In an environment where the cost of living remains stubbornly high, this kind of withholding from your income can pose real problems when trying to make ends meet, and force people into choosing between vital expenses,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.

Most people who default on their student loans “truly cannot afford to pay them,” James Kvaal, who served as U.S. undersecretary of education for former President Joe Biden, said in an April interview with CNBC.

“The consequences are punitive and sometimes tragic,” Kvaal said.

She felt terrified when she received a recent notice from the Education Dept. that her retirement check could be offset. Nearly all of her income comes from her monthly Social Security benefit of around $2,600. Social Security benefits can generally be reduced by up to 15% to repay student debt in default, so long as beneficiaries are left with at least $750 per month.

“When I saw that email, it made me sick to my stomach,” Paul said.

Already on a tight budget in retirement, the garnishment will force her to cut back on her everyday expenses, skip necessary repairs on her house in Maryland and forgo traveling to her home country.

“I don’t know the last time I had a vacation,” she said. “I’ve paid into the system and I should be able to retire.”

More than 450,000 borrowers ages 62 and older in default on their federal student loans and likely to be receiving Social Security benefits, the Consumer Financial Protection Bureau found earlier this year.

Millions of borrowers who signed up for the Biden administration’s new repayment plan, known as SAVE, or the Saving on a Valuable Education program, were caught in limbo after GOP-led lawsuits managed to get the plan blocked in the summer of last year. Many of those borrowers will now have to switch out of a Biden-era payment pause and into another repayment plan that will spike their monthly bill.

But in recent months, the Trump administration has terminated around half of the Education Department’s staff, including many of the people who helped assist borrowers.

Now some student loan borrowers report waiting hours on the phone before being able to reach someone about their debt, despite the Trump administration telling borrowers to contact it to get current.

The Education Department did not respond to a request for comment.

She received conflicting information over whether her student loan servicer was Mohela or Navient (millions of people have had their accounts transferred between companies in recent years.) When she tried to reach someone at Navient about her student debt, she was on hold for more than two hours.

Meanwhile, a representative at Mohela couldn’t tell her what her new student loan payment would be, though she was quoted $319 by the company’s automated phone system.

Mohela and Navient did not respond to a request for comment.

Brown is still not sure which company is managing her account.

“The narrative is that people are dodging their payments,” Brown said, but added that she doesn’t think that’s true for many borrowers. “I truly believe many people will be blindsided due to lack of guidance on how to repay.”

If she’s not able to reach someone at the Education Dept. to get current on her payments and her wages are garnished, it’ll be a significant hardship for her family, she said.

“We’re living paycheck to paycheck,” she said. “I’m lucky if I can even put aside $100 for myself.”

As the Trump administration ramps up its student loan collection efforts, worried borrowers need to ask themselves a key question: Am I delinquent, or in default? The answer determines your best next steps.

“We’ve had a lot of clients contacting us recently who are extremely stressed and, in some cases panicked, about their loan situation,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.

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However, some borrowers wrongly believe they’ll be subject to wage garnishments or offsets of their retirement benefits — when in fact they are delinquent but not yet in default, Nierman said.

If you’re delinquent, there are things you can do to avoid default. And even those who are in default and at risk for collections can take steps to avoid such outcomes.

“The federal student loan system does provide several paths for bringing loans out of default,” she said.

Nearly 8% of total student debt was reported as 90 days past due in the first quarter of 2025, the New York Fed recently found.

Once you are delinquent for 90 days or more, your student loan servicer will report your past due status to the national credit bureaus, which can lead to a drop in your credit score.

The Federal Reserve predicted in March that some people with a student loan delinquency could see their scores fall by as much as 171 points. (Credit scores typically range from 300 to 850, with around 670 and higher considered good.)

Lower credit scores can lead to higher borrowing costs on consumer loans such as mortgages, car loans and credit cards.

But you’re not considered to be in default on your student loans until you haven’t made your scheduled payment in at least 270 days, the Education Department says.

The federal government has extraordinary collection powers on its student loans and it can seize borrowers’ tax refunds, paychecks and Social Security retirement and disability benefits.

But only those who’ve defaulted on their student loans can face these consequences, experts said.

There are also economic hardship and unemployment deferments available for those who qualify, as well as other ways to keep your loan payments paused while not falling behind.

You can contact the government’s Default Resolution Group and pursue a number of different avenues to get current on your loans, including enrolling in an income-driven repayment plan or signing up for loan rehabilitation. 

You can get out of default on your student loans through rehabilitating or consolidating your debt, Nierman said.

Rehabilitating involves making “nine voluntary, reasonable and affordable monthly payments,” according to the U.S. Department of Education. Those nine payments can be made over “a period of 10 consecutive months,” it said.

Consolidation, meanwhile, may be available to those who “make three consecutive, voluntary, on-time, full monthly payments.” At that point, they can essentially repackage their debt into a new loan.

After you’ve emerged from default, experts also recommend requesting a monthly bill you can afford.

If you don’t know who your loan servicer is, you can find out at Studentaid.gov.

“Explore your options and create a plan for returning your loans back to good standing so you will not be subject to punitive collections activity,” Nierman said.

Long-term care can be costly, extending well beyond $100,000. Yet, financial advisors say many households aren’t prepared to manage the expense.

“People don’t plan for it in advance,” said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida. “It’s a huge problem.”

Over half, 57%, of Americans who turn 65 today will develop a disability serious enough to require long-term care, according to a 2022 report published by the U.S. Department of Health and Human Services and the Urban Institute. Such disabilities might include cognitive or nervous system disorders like dementia, Alzheimer’s or Parkinson’s disease, or complications from a stroke, for example.

The average future cost of long-term care for someone turning 65 today is about $122,400, the HHS-Urban report said.

But some people need care for many years, pushing lifetime costs well into the hundreds of thousands of dollars — a sum “out of reach for many Americans,” report authors Richard Johnson and Judith Dey wrote.

The number of people who need care is expected to swell as the U.S. population ages amid increasing longevity.

“It’s pretty clear [workers] don’t have that amount of savings in retirement, that amount of savings in their checking or savings accounts, and the majority don’t have long-term care insurance,” said Bridget Bearden, a research and development strategist at the Employee Benefit Research Institute.

“So where is the money going to come from?” she added.

Nationally, it costs about $6,300 a month for a home health aide and $9,700 for a private room in a nursing home for the typical person, according to 2023 data from Genworth, an insurer.

It seems many households are unaware of the potential costs, either for themselves or their loved ones.

For example, 73% of workers say there’s at least one adult for whom they may need to provide long-term care in the future, according to a new poll by the Employee Benefit Research Institute.

However, just 29% of these future caregivers — who may wind up footing at least part of the future bill —had estimated the future cost of care, EBRI found. Of those who did, 37% thought the price tag would fall below $25,000 a year, the group said.

The EBRI survey polled 2,445 employees from ages 20 to 74 years old in late 2024.

For example, Medicare may partially cover “skilled” care for the first 100 days, said McClanahan, the founder of Life Planning Partners and a member of CNBC’s Financial Advisor Council. This may be when a patient requires a nurse to help with rehab or administer medicine, for example, she said.

But Medicare doesn’t cover “custodial” care, when someone needs help with daily activities like bathing, dressing, using the bathroom and eating, McClanahan said. These basic everyday tasks constitute the majority of long-term care needs, according to the HHS-Urban report.

Medicaid is the largest payer of long-term care costs today, Bearden said. Not everyone qualifies, though: Many people who get Medicaid benefits are from lower-income households, EBRI’s Bearden said. To receive benefits for long-term care, households may first have to exhaust a big chunk of their financial assets.

“You basically have to be destitute,” McClanahan said.

Republicans in Washington are weighing cuts to Medicaid as part of a large tax-cut package. If successful, it’d likely be harder for Americans to get Medicaid benefits for long-term care, experts said.

Few households have insurance policies that specifically hedge against long-term care risk: About 7.5 million Americans had some form of long-term care insurance coverage in 2020, according to the Congressional Research Service.

By comparison, more than 4 million baby boomers are expected to retire per year from 2024 to 2027.

Washington state has a public long-term care insurance program for residents, and other states like California, Massachusetts, Minnesota, New York and Pennsylvania are exploring their own.

Long-term care insurance policies make most sense for people who have a high risk of needing care for a lengthy duration, McClanahan said. That may include those who have a high risk of dementia or have longevity in their family history, she said.

McClanahan recommends opting for a hybrid insurance policy that combines life insurance and a long-term care benefit; traditional stand-alone policies only meant for long-term care are generally expensive, she said.

Be wary of how the policy pays benefits, too, she said.

For example, “reimbursement” policies require the insured to choose from a list of preferred providers and submit receipts for reimbursement, McClanahan said. For some, especially seniors, that may be difficult without assistance, she said.

With “indemnity” policies, which McClanahan recommends, insurers generally write benefit checks as soon as the insured qualifies for assistance, and they can spend the money how they see fit. However, the benefit amount is often lower than reimbursement policies, she said.