Starting next month, the Education Department says student loans that are in default will be referred for collections. Roughly 5.3 million borrowers are in default on their federal student loans and soon could be subject to having their wages garnished.

Since the pandemic, federal student loan borrowers have been mostly protected from the harshest consequences of defaulting. That's about to change.

In an announcement this week, the department warned that millions of borrowers could be referred to debt collectors and see deductions from their paychecks.