ROCHESTER, N.Y. – President Donald Trump has reversed a decision that could impact hundreds of thousands of Americans who defaulted on student loans. Initially, the Trump administration warned that Social Security benefits would be garnished for those who defaulted, but this plan has now been paused.
The administration’s decision is a relief for 450,000 individuals aged 62 and older with decades-old student loans, said officials.
When student loans are defaulted, the federal government can garnish wages, tax refunds, and Social Security and disability benefits. Instead of seizing Social Security, the administration is reaching out to borrowers with payment plan options.
Garnishing Social Security benefits could have dire consequences for retirees, said the director of the Education Debt Consumer Assistance Program in New York.
In other consumer news, a growing number of consumers are using buy now, pay later loans for everyday expenses like groceries. Nearly a quarter of consumers using these loans finance groceries, up from 14% a year ago. Financial experts are concerned that this trend indicates growing consumer financial strain.
The ease of these loans may encourage young and low-income borrowers to take on more debt than they can handle, experts said.
Additionally, AAA reports that Americans remain hesitant to buy electric vehicles despite falling prices. Only 16% of adults say they are “very likely” or “likely” to purchase an EV, the lowest percentage since 2019.
AAA said consumers believe the costs are still too high for both EVs and their repairs.
Prices for new EVs have fallen 15% from two years ago, and used EVs have seen a 42% plunge in a year, but most consumers remain uninterested.
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