U.S. Department of Education shows a sharp increase of students defaulting on their loans. Illinois graduates carry an average of $23,885 in debt . This indebtedness will probably not improve any time soon. USA Today reports, “The fixed interest rate on Stafford federal subsidized loans…is set to double on July 1.” It will likely go from the current 3.4% to 6.8%. According to the Huffington Post , the budget proposed by Rep. Paul Ryan “would cut Pell grant eligibility” for part- time students. Currently, students do not generally make loan payments until after they are out of school. [The Ryan budget] would require students with “federal student loans… to start paying interest on their loans while still in school.”

Employers are also affected by issues related to student debt. Rising tuition and shrinking assistance discourage tomorrow’s workers from pursuing secondary education. Manufacturing.Net states, “Lost production time, workplace injuries, and inefficient…work practices can all contribute to the cost of an untrained worker.” The cost of education discourages current employees from increasing their skills levels. It also makes subsidizing employee education much higher. Employers must also contend with the legal responsibility of garnishing wages from students in default of State and Federal Student Loans.

Student Resources:

Those with student loans or those who plan to attend college will want to investigate these options for tuition assistance or loan forgiveness:

• Stafford Loan Forgiveness Program for Teachers
• AmeriCorps
• Peace Corps
• Volunteers in Service to America (VISTA)
• Military Stafford Loan Forgiveness
• Forgiveness for Legal and Medical Studies
• Illinois workNet information on college financial aid including grants and scholarships
• Illinois Student Assistance Commission : guidance for students whose loans are in default

Business Resources:

• Training programs for your employees
• Administrative Wage Garnishment - A Guide For Employers: An employer who fails to garnish wages of those in student debt default if required, “will be liable for, and subject to, suit by the Department to recover any amount that the employer fails to withhold after receipt of the AWG withholding order, plus attorneys' fees, costs, and, in the court's discretion, punitive damages.”
• The Business Times : “Garnishing information: Employers must follow procedures”