Betsy Mayotte

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125 appearances 2 recordings 1 series first heard Jan 2026 last heard 27 Jan

Betsy Mayotte’s voice in public audio — every appearance, attributed to the second.

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Marketplace All-in-One · The changes coming to federal student loans in 2026 · 20 Jan 2026 podcast

It has a huge impact on their credit scores, which affects other types of credit and prevents these people from buying homes, buying cars, qualifying for apartments, even getting certain types of jobs.

So the depressing trickle down of a defaulted student loan should not be ignored.

And it's something I unfortunately think these historic default rates, I think, are something we're going to be living with for, it's not going to be a flash in the pan.

So federal student loans, they've always garnished the wages for defaulted borrowers.

Speaking of things that never happened before, during COVID, they stopped.

And we actually thought they were going to reinstate the garnishment of wages last year, but for whatever reason, they didn't.

And they did announce, though, at the end of last year that they were going to start this month.

And then, as you mentioned, on Friday, they went, oh, never mind.

We're not going to start yet.

And in addition to not starting wage garnishment, they announced they were going to stop offsetting people's tax refunds, which is something they did start up again last year.

As again, as I mentioned.

They've always garnished the wages of defaulted student loan borrowers if those borrowers have failed to set up a repayment plan or resolve the default.

I'm not sure why they decided at the last minute to not start doing it again.

I want to emphasize that I do think this is a temporary reprieve.

I would not be surprised if they started doing it again either after July 1st when a lot of the HR1 provisions come into play or after midterms.

Boy, did it ever.

So as far as existing borrowers go, some of the changes include they're introducing a new repayment plan called the RAP plan.

And for some borrowers, that plan is going to be more beneficial than existing plans.

And for some borrowers, it's going to be nowhere near as beneficial as existing plans.

HR1 also sunsets or gets rid of some plans, some of the plans based on income, such as what we call the pay-as-you-earn plan or income contingent.

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