An unwelcome surprise for some student loan borrowers

Summary

Marketplace Morning Report
Episode: An unwelcome surprise for some student loan borrowers
Date: December 31, 2025
Host: Nova Safo (in for David Brancaccio)

---

Episode Overview

This episode highlights two major economic developments:

1. The imminent resumption of wage garnishments for federal student loan borrowers in default—a first since the pandemic began.
2. The historic end of penny production in the United States, capping over two centuries in circulation.

Expert guests discuss the wide-reaching impacts of the return of aggressive student loan collections and bankruptcy reforms, while a numismatist reflects on the penny's legacy. The episode is informative, warm, and focuses on how financial policies shape everyday lives.

---

Key Discussion Points and Insights

1. Student Loan Wage Garnishments Set to Resume

[01:02–03:02]

• Resumption of Garnishments: Next week, the U.S. Department of Education will start sending letters to federal student loan borrowers who have missed at least nine months of payments (in default), warning of wage garnishment—up to 15% of their paychecks.

• Magnitude of the Issue:

  • 5 million in default; millions more are behind on their loans.
  • “Before the pandemic, it was common for people who went into default on their federal student loans to have their wages garnished.” —Betsy Mayotte, The Institute of Student Loan Advisors [01:33]
  • The government can garnish wages administratively, without seeking a court order.

• Potential for Increasing Defaults:

  • “I think there's nearly universal recognition that that 5 million could easily become 8 to 10 million in the next few months.” —Adam Minsky, Student Loan Lawyer [02:03]
  • Many borrowers may be unaware they're behind because they've moved or haven’t received loan notifications due to the extended pandemic pause.

• Stacked Financial Pressures:

  • The most affordable income-based repayment plan is being phased out.
  • Enhanced Affordable Care Act (ACA) health insurance subsidies are ending.
  • Mayotte warns: “Those things together are going to create real, real hardship, especially for low and middle income families.” [02:45]

• Advice for Borrowers in Default:

  • “For people who are in default… there are options to get loans back in good standing, and they're better than a smaller paycheck.” —Betsy Mayotte [02:51]

Notable Quotes

• On wage garnishment power:
  • “Unlike other creditors, the federal government doesn't have to go to court to start garnishing people's wages once they're in default. It can just do it.” —Betsy Mayotte [01:45]
• Impact of notices:
  • “A lot of people are probably going to be surprised when they get hit with the garnishment and it will be happening at a difficult time for many.” —Adam Minsky [02:21]

2. Student Loan Discharge Through Bankruptcy Becomes Easier

[03:02–03:33]

• Policy Change: Since the Biden administration's reforms three years ago, it is far easier for borrowers to discharge federal student loans via bankruptcy.
  • “A new study from the University of Utah finds the discharge success rate through bankruptcy is now at 87%, much higher than before the reforms.” —Nova Safo [03:02]

3. Global Business News Brief

[03:33–03:56]

• Reports of Warner Bros. Discovery planning to reject a $100 billion takeover bid from Paramount Skydance, eyeing a possible sale to Netflix instead and a spin-off of its cable TV assets.

4. The End of the Penny

[04:55–07:54]

• Final Production: President Trump ordered the U.S. Mint to stop making pennies due to rising production costs (over 3 cents to make 1 cent).

• Historical Context:

  • Stephen Roach, numismatist, provides a history of the penny and U.S. coinage.
  • Penny size, composition, and production methods have evolved repeatedly with economic conditions.
  • “It takes about 3.4 cents to make a cent. Makes no sense, no pun intended.” —Stephen Roach [07:18]
  • Though production has ended, pennies remain legal tender—and it will take decades for them to disappear due to 100+ billion still in circulation.

• Auction of Final Pennies:

  • The last batch minted (700 pennies) was auctioned off for $17 million, with a face value of only $7.
    • “Collectors shelled out almost $17 million for just 700 pennies. That means the face value of those coins was a mere $7. You do that math.” —Nova Safo [07:54]

Notable Quotes

• “When the cent was struck beginning in 1793, for commerce, it was about the size of a half dollar… As time goes on, inflation increases and you have to adapt.” —Stephen Roach [05:24–07:18]
• “With the cent no longer being struck, it's just been suspended, so it's not demonetized. There are estimates of over 100 billion pennies in circulation. I don't foresee them really going away anytime soon.” —Stephen Roach [07:34]

---

Memorable Moments & Timestamps

• 01:02–03:02: In-depth segment on resumption of student loan wage garnishment and the impact on borrowers.
• 03:02–03:33: Surprising uptick in student loan bankruptcy discharges since policy changes.
• 04:55–07:54: A numismatist narrates the end of penny production, its historical context, and the market’s response to its rarity.

---

Final Thoughts

This episode delivers concise but powerful reporting on two unfolding economic stories touching millions of Americans: the looming hardship for student loan borrowers as federal collections resume, and the symbolic end of the penny—a victim of its own inefficiency. The voices of experts add urgency and context, making this a valuable listen for anyone concerned with financial policy and its human impact.

Transcript

[VRBO Advertiser]

Save over $200 when you book weekly stays with VRBO this winter. If you need to work, why not work from a chalet? If you haven't seen your college besties since, well, college. You need a week to fully catch up in a snowy cabin. And if you have to stay in a remote place with your in laws, you should save over $200 a week. That's the least we can do. So you might as well start digging out the long johns because saving over $200 on a week long snowcation rental is in the cards book [e-mail] the.

[LifeLock Advertiser]

Holidays mean more travel, more shopping, more time online and more personal info in more places that could expose you more to identity theft. But LifeLock monitors millions of data points per second. If your identity is stolen, our US based restoration specialists will fix it, guaranteed or your money back. Don't face drained accounts, fraudulent loans or financial losses alone. Get more holiday fun and less Holiday worry with LifeLock. Save up to 40% your first year bill. Visit LifeLock.comSpecialOffer Terms Apply some federal student.

[Nova Safo]

Loan borrowers are in for an unwelcome surprise For Marketplace, I'm Nova Safo in for David Brancaccio. People who are in default on their federal student loans could start seeing their wages garnished in the new year. Next week, the Department of Education plans to start sending out letters to borrowers who have missed at least nine months of payments, letting them know the government will begin taking 15% from their paychecks. Garnishments are resuming for the first time since the COVID pandemic began. Marketplace's Samantha Fields has more.

[Betsy Mayotte]

Before the pandemic, it was common for people who went into default on their federal student loans to have their wages garnished.

[Narrator/Host]

It was one of the most effective collection tactics that the Department of Education has at its disposal.

[Betsy Mayotte]

Betsy Mayotte at the nonprofit the Institute of Student Loan Advisors says unlike other creditors, the federal government doesn't have to go to court to start garnishing people's wages once they're in default. It can just do it. Around 5 million people are currently in default on their student loans, according to federal data, and millions more are behind on their payments.

[Adam Minsky]

I think there's nearly universal recognition that that 5 million could easily become 8 to 10 million in the next few.

[Betsy Mayotte]

Months, adam Minsky, a lawyer who works with borrowers, says. Lots of people are probably unaware that the years long Covid payment pause is over and they're behind a lot of cases.

[Adam Minsky]

These are old loans borrowers may have moved, change their address, they may not be receiving notifications. And so I have a feeling that a lot of people are probably going to be surprised when they get hit.

[Betsy Mayotte]

With the garnishment and it will be happening at a difficult time for many. Betsy Mayotte says as the most affordable income based repayment plan for student loans is going away and as enhanced subsidies for ACA health insurance expire, I'm afraid.

[Narrator/Host]

That those things together are going to create real, real hardship, especially for low and middle income families.

[Betsy Mayotte]

For people who are in default, she says there are options to get loans back in good standing and they're better than a smaller paycheck. I'm Samantha Fields for Marketplace.

[Nova Safo]

Meanwhile, many people struggling to pay back student loans may not realize it's become easier to discharge their debt through bankruptcy. That wasn't always the case. The Biden administration implemented some changes three years ago. A new study from the University of Utah finds the discharge success success rate through bankruptcy is now at 87%, much higher than than before the reforms. There are reports this morning that Warner Bros. Discovery is set to reject an updated takeover bid from Paramount Skydance, set to be worth more than $100 billion. Warner wants to sell itself to Netflix instead while spinning off its cable TV assets. Paramount has launched a hostile effort.

[Mrs. Claus]

Guys, thanks for helping me carry my Christmas tree.

[Drew Ski]

Zoe. This thing weighs a ton.

[Narrator/Host]

Drew Ski, lift with your legs man.

[Stephen Roach]

Santa.

[Narrator/Host]

Santa, did you get my letter?

[Drew Ski]

He's talking to you Bridges.

[Stephen Roach]

I'm not.

[Mrs. Claus]

Of course he did.

[Stephen Roach]

Right Santa, you know my elf Drew Ski here. He handles the nice list.

[Drew Ski]

And elf, I'm six three. What everyone wants is iPhone 17 and at T Mobile you can get it on them. That center stage front camera is amazing for group selfies, right Mrs. Claus?

[Mrs. Claus]

I'm Mrs. Claus much younger sister and AT T Mobile there's no trade in needed when you switch so you can.

[Stephen Roach]

Keep your old phone or give it as a gift.

[Mrs. Claus]

And the best part, you can make the switch to T mobile from your phone in just 15 minutes.

[Stephen Roach]

Nice.

[Drew Ski]

My side of the tree is slipping.

[Narrator/Host]

Kimber. The holidays are better.

[LifeLock Advertiser]

AT T Mobile switch in just 15 minutes and get iPhone 17 on us with no trade in needed. And now T Mobile is available in US cellular stores with 24 month bill credits for well qualified customers plus tax and $35 device connection charge credit ended balance due if you pay off earlier. Cancel Finance agreement. 256 gigs $830 eligible for it in a new line $100 plus a month plan with auto payments taxes Fees required. Check out 15 minutes or less per line.

[Nova Safo]

Visit t mobile.com We've been closing out 2025 by looking back at some of the biggest economic events of the year. Global tariffs, the artificial intelligence boom, and this morning, the beginning of the end of the penny. President Trump this year ordered the Treasury Department to stop making the coins because it costs more than 3 cents to make. One pen it pressed the final batch last month, ending a 232 year run. Here's more on that history.

[Stephen Roach]

My name is Stephen Roach. I am the numismatist for the American Numismatic Association. I've been involved with the ANA since I was a teenager and now I'm fortunate enough to be able to live and breathe numismatics as a profession. Numismatics is such an obscure word, it's not one you tend to hear in someone's daily vernacular. In short, numismatics is the study of coins, paper money, things related. So if it's been used as money, there's someone who's going to specialize in it. The first coins came about for the U.S. federally in 1792 with Coinage Act, April 2, 1792. But our original coinage was struck manually by a screw press. They can make probably about 30 coins a minute, maybe 40 if you're really good. That would change in 1836 to be 100 coins a minute with steam power. Over time, you know, advancements in technology went from, you know, 1836 to 100 coins a minute to today with hydraulic presses striking just over 700 coins a minute. When the cent was struck beginning in 1793, for commerce, it was about the size of a half dollar. What's occurring now is happened in the past. So in 1857, the rising price of copper resulted in the Mint to find an alternative. So they made a smaller diameter, known as the reduced diameter cent. And there was a nickel copper composition a little bit thicker than our regular cents today. But this has kind of been a natural state of the denomination. And as time goes on, inflation increases and you have to adapt to the current economic environment. It takes about 3.4 cents to make a cent. Makes no sense, no pun intended. With the scent no longer being struck, it's just been suspended, so it's not demonetized. There are estimates of over 100 billion pennies in circulation. I don't foresee them really going away anytime soon. It's something that's really going to take decades to really see the disappearing of the 1 cent denomination from circulation.

[Nova Safo]

Stephen Roach NUMISMATIST at the American Numismatic association, based in Colorado Springs. By the way, the final pennies the US Mint produced last month were auctioned off. Collectors shelled out almost $17 million for just 700 pennies. That means the face value of those coins was a mere $7. You do that math. I'm Novah Saffo with the Marketplace Morning report. From apm american public.