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.