Today, Explained – “Your student loan bill is due”

Date: January 13, 2026
Hosts: Noel King, Sean Rameswaram
Guests: Chris Quintana (USA Today investigative reporter), Jason Uliano (University of Utah law professor), Multiple student loan borrowers

Overview

This episode unpacks the looming realities for millions of Americans as federal student loan collections ramp back up, focusing on wage garnishment, the emotional and financial toll on borrowers, and a surprising myth-busting revelation about discharging student loans through bankruptcy. The episode features personal stories from borrowers, reporting insights, and legal analysis, aiming to explain the shifting policies and their real-life impacts.

Key Discussion Points & Insights

1. The Restart of Student Loan Collections

• Background: After a years-long pandemic pause, federal student loan payments and collections are resuming.
• Key Policy Change: Starting next month, the federal government will restart collection on defaulted loans, with wage garnishment being implemented as a major tool.
  • Wage garnishment: Up to 15% of disposable income can be taken from paychecks of those in default (03:10, Chris Quintana).
  • Who’s affected: Initially about a thousand borrowers, but number will grow.

“They can seize your tax refund. They can seize Social Security benefits. They can also garnish your wages."
— Chris Quintana (02:32)

2. Borrower Struggles and Personal Accounts

• Borrowers voiced anxiety around the impossibility of repayments amid high living costs.

  • Quote: “We are working. Some of us have second jobs, and we want to pay our student loans. We're trying, and yet we're getting nowhere.” (03:10, Borrower 1)
  • Payments resuming as high as $600/month for some, pushing them toward certain default.

• Consequences: Delinquency and default dramatically impact credit scores, affecting car loans, mortgages, and more (04:58).

3. Scope of the Problem

• Numbers:
  • 5.5 million in default
  • 6 million more delinquent

"There are degrees to this... delinquency... and then default is like the next level. That is kind of when you haven't paid for 270 days. Plus, roughly 5.5 million people are in default."
— Chris Quintana (04:11)

4. Guidance for Borrowers in Trouble

• Case Study: Lexi from Michigan, who owes $17,000 but never completed her degree, hasn’t paid or checked in years due to pandemic forbearance.
• Expert advice:
  • Immediately contact your loan servicer or check studentaid.gov for your account status.
  • Options include payment plans, settling debts, or income-based repayment.

"There's not a lot of benefit in waiting to take action."
— Chris Quintana (08:10)

5. Economic Ripple Effects

• Wage garnishments and credit downgrades of millions could reduce consumer spending and further constrain the U.S. economy.

"It's not hard to think what impact that will have... it affects people's ability to spend recreationally, it affects their ability to spend on things that they need..."
— Chris Quintana (09:02)

6. Changing the System: Front-End Reforms

• Capping Federal Loans:
  • New federal caps: $100,000 total for most graduate programs; $200,000 for law/medicine; $50,000 annually (10:19).
  • Aim: Prevent schools from charging whatever they like knowing unlimited loans will be issued.
• Private Lending Risk:
  • Cap may push more students to risky, less-protected private loans.
• Pell Grants for Short Programs:
  • Pell grants now available for shorter, vocational or trade programs (11:49) in hopes of providing less burdensome pathways to careers.

7. Busting the Bankruptcy Myth

Guest: Jason Uliano, University of Utah S.J. Quinney College of Law

The Myth

• Common wisdom: “Student loan debt can’t be discharged in bankruptcy.”
• Reality (2026): With new federal guidelines, the large majority of bankruptcy filers who seek loan discharge are successful.

“The most recent data I have is that 87% of the student loan debtors who are following this new process... successfully discharged their student loans.”
— Jason Uliano (16:32)

Historical Reason

• Restrictive laws created in the 1970s-80s due to concern about abuse—wrongly labeling borrowers as “fleece Uncle Sam” types (18:15).
• Required proof of “undue hardship” for discharge, a notoriously high bar with a three-part test: inability to pay now, unlikely to improve, and good-faith effort to repay before (19:59).

What Changed

• 2022 Guidance: Department of Justice and Department of Education now less adversarial, actively screening for borrowers who clearly meet the hardship standard and not contesting those cases (20:39).
• Result: Success rate for discharge up from 40% (2007) to 87% (latest data).

Who Can Succeed?

• Bankruptcy filers who genuinely can’t repay and meet the hardship test.
• Not an option for every borrower, but much more accessible than commonly believed.

Credit and Moral Stigma

• Discharging loans in bankruptcy doesn’t worsen credit (already affected by bankruptcy itself).
• Urges to view bankruptcy as a “fresh start,” not a moral failing (23:25).

“The Supreme Court has said for the past hundred years... it's designed to give honest but unfortunate debtors a fresh start at life.”
— Jason Uliano (23:25)

On Responsibility and Fairness

• The system isn't about letting everyone off the hook, but providing relief to those truly crushed by debt, where fees and interest make repayment impossible.

Notable Quotes & Memorable Moments

• Student Borrower's Reflection:
  “Thank goodness I don't have kids... there's no way I could pay on my student loans, pay my rent, pay for groceries. No way.” (00:45)

• Economic Impact Summary:
  “There are millions of Lexis... it's going to be substantial.” (09:02, Chris Quintana)

• Legal Surprise:
  “I have actually heard this a thousand times in my life. Your student loans are not bankruptible... so if you're telling me 87% of people who are trying this are succeeding, something happened here.” (17:10, Noel King)

• Myth Busting Summed Up:
  “Historically it's been thought that you can't get out of your student loans by declaring bankruptcy. But factually on the ground, the empirics paint a very, very different picture...” (16:32, Jason Uliano)

Timestamps for Key Segments

• [02:03] – Chris Quintana explains the new federal wage garnishment program.
• [03:10] – Borrower stories highlight the impossible math of repayment.
• [04:08] – Discussing delinquency vs. default; scope of the problem.
• [05:40] – Lexi’s question: what now if I haven’t paid since the pandemic?
• [06:06] – Chris Quintana's advice: what to do if you’re lost or behind.
• [09:02] – Broader economic impacts of mass borrower distress.
• [10:19] – New federal lending caps and the push toward trade programs.
• [15:59] – Listener voicemails of six-figure student debt burdens.
• [16:32] – Jason Uliano debunks the bankruptcy myth and explains new policy.
• [19:59] – The “undue hardship” test for bankruptcy described.
• [20:39] – What’s changed: the new, much more accessible bankruptcy process.
• [22:29] – Who qualifies now, and what the process looks like.
• [23:25] – On credit, stigma, and the true purpose of bankruptcy.

Takeaways

• The federal government is stepping up student loan collections, with wage garnishment looming for those in default—even as millions struggle to pay basic bills.
• New policies are capping graduate federal loans and pushing alternative, less expensive credentials.
• Longstanding beliefs about the impossibility of discharging student loans via bankruptcy are outdated. The majority of bankruptcy filers who apply are now succeeding—an “unprecedented” shift.
• The combination of rising defaults and evolving policies will have significant, uncertain effects on both individuals and the broader economy.

For listeners caught in the maze of student debt:

• Check your loan status ASAP (studentaid.gov).
• Don’t wait to seek repayment options if you’re in trouble.
• If facing bankruptcy, know that student loan relief is more attainable than you’ve heard.
• Remember: There’s help, and there are new paths forward—even through bankruptcy.