As Wage Garnishment Looms, Federal Student Loan Borrowers Indicate They Could Prioritize Their Student Loans Ahead of Credit Cards and Personal Loans

CHICAGO, Sept. 25, 2025 (GLOBE NEWSWIRE) — Millions of delinquent federal student loan borrowers are bracing for the possible resumption of involuntary collections by the U.S. Department of Education, such as wage garnishment or the withholding of tax refunds or Social Security benefits. A new survey from TransUnion (NYSE: TRU) highlights a growing concern related to this issue.

When asked about the prospect of prioritizing student loan payments with their existing credit accounts, federal student loan borrowers indicated they intend to pay their mortgage and auto loans first. However, in the face of involuntary collections, they prioritized their student loan payments ahead of credit cards and personal loans.

An early examination of delinquent federal student loan borrowers across the credit portfolio over the period from December 2024 to June 2025 supports this sentiment. While serious delinquency rose across each of these credit products among the delinquent student loan population, the rate of growth was generally aligned with the priorities reflected in the survey. Secured products, such as mortgages and auto showed a significantly lower increase in delinquencies than unsecured personal loans and credit cards.

Delinquency for Auto and Mortgage Among Seriously Delinquent Federal Student Loan Borrowers Increased at a Slower Rate Than Unsecured Personal Loans and Credit Cards