The Consumer Financial Protection Bureau posted a blog Monday stating that there are more than 7 million borrowers in default on federal of private student loans.
The CFPB obtained the data from the Department of Education and found that among those borrowers, 6.5 million borrowers had defaulted on two federal loan programs as of June 30.
"Defaulting on a federal student loan has serious consequences," Rohit Chopra, the CFPB's student loan ombudsman, said in the blog. "Unlike other consumer credit, borrowers in default on a federal student loan might see their tax refund taken and their wages garnished without a court order."
"The agency does not have regulatory jurisdiction over federally-backed loans but they make up more than 83% of the roughly $1.2 trillion loan market," writes American Banker's Rachel Witkowski.
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