• This summer, millions of defaulted student-loan borrowers could face wage and federal benefits garnishment.
• They have options to avoid those consequences, but some routes can take longer than others.
• Options include loan consolidation, loan rehabilitation, and bankruptcy.

This summer, millions of student-loan borrowers could lose some of their wages and federal benefits if they don't start making payments.

They have options to avoid those consequences — but it won't be easy.

After President Donald Trump's administration restarted collections on defaulted student loans on May 5, his Education Department said it sent notices to 195,000 defaulted borrowers that some of their federal benefits, like Social Security, may start being withheld in early June.

"Later this summer, all 5.3 million defaulted borrowers will receive a notice from Treasury that their earnings will be subject to administrative wage garnishment," the department said. Most federal borrowers enter default when they have not made a payment in over 270 days.

Business Insider has spoken to student-loan borrowers behind on payments and worried about how they'll budget th restart and navigate wage garnishment. Millions have been free of benefits garnishment and negative credit reporting for the past five years under a pandemic pause that began under Trump and continued under former President Joe Biden. Now that collections have restarted, borrowers in default can tap into three different options to evade long-term consequences: loan rehabilitation, loan consolidation, or bankruptcy.

Rae Kaplan, a student-loan attorney based in Chicago, told Business Insider that while default consequences were standard before the pandemic, the five-year pause brings extra stress to the collections restart because "a lot of people took this out of their budget," adding that "five years is a long time" to get used to not paying.

"So I think this period where they start ramping up collection activities is going to cause a lot of panic out there for borrowers," Kaplan said. Some borrowers in default previously told BI that they're not confident they'll be able to avoid garnishment.

Here are some options that defaulted student-loan borrowers have to avoid having some of their wages and federal benefits seized.

Loan rehabilitation

Loan rehabilitation can take months, but it has several benefits, including eventual removal of the borrower's default status from their credit reports.

To rehabilitate a defaulted loan, the borrower needs to contact their student loan holder and sign an agreement to make nine payments within 20 days of the due date during a period of 10 consecutive months.

The payment amount is intended to be affordable; according to Federal Student Aid, the payment will be equal to up to 15% of the borrower's discretionary income divided by 12. Kaplan said that it's helpful to hire an attorney or an advocate to negotiate low payments, and it's possible that borrowers can end up with payments as low as $5 a month through this route.

Notably, wage and benefits garnishment will continue during part of the loan rehabilitation process, and the benefits that are seized would be in addition to the agreed-upon rehabilitation payments. Garnishment will continue until the borrower has made at least five rehabilitation payments or the loan is no longer in default.

Additionally, borrowers can only rehabilitate a defaulted student loan once; if the loan defaults again, rehabilitation will not be an option.

"Once we get you rehabilitated, then your credit score will go up," Kaplan said. "So it's a nice feature that you can both get back to current and in good standing, get your loans back into good status, and get that negative credit removed from your credit report."

Loan consolidation

Consolidating a defaulted student loan is quicker than rehabilitation, but the record of the default will remain on the borrower's credit history.

Borrowers can apply with Federal Student Aid to consolidate their defaulted student loans into a federal direct consolidation loan. To be approved for consolidation, the borrower must agree to pay off the consolidated loan under an income-driven repayment plan or make three consecutive, on-time, full monthly payments before consolidating.

After the loan is consolidated, the borrower can make use of all federal student-loan benefits, including deferments, forbearances, and loan forgiveness.

Bankruptcy

If a defaulted borrower does not think that consolidation or rehabilitation is feasible, they can file for bankruptcy.

Dustin Baker, an Iowa bankruptcy attorney, told BI that filing for bankruptcy is "a very efficient way" to stop wage and benefits garnishment because once a bankruptcy petition is filed, creditors are no longer allowed to contact and collect from the borrower.

"If nothing else, it's kind of a four or five-month break to figure out what to do," Baker said, adding that he's already received an increase in requests from borrowers worried about collections on defaulted student loans.

Prior to 2022, student-loan borrowers had to clear a high and burdensome threshold to discharge their loans in bankruptcy. However, Biden issued new guidance in November 2022 to streamline the process, and Baker said he's had much greater success discharging borrowers' student loans in recent years.

"It seems like it's moving more quickly now," Baker said. "They've allocated the appropriate resources, and it's not a partisan thing. Biden started this process, Trump reaffirmed it, and it sounds like the administration at least is providing the appropriate resources to make it happen."

• How long does it take a CEO to make what workers at their company earn in a year?
• BI analyzed the compensation of CEOs and median employees from S&P 500 companies to find out.
• For some CEOs at big companies, it would only take several hours.

For some chief executives, it would take about a day to make what a typical employee at their company makes in a year. For some leaders, it would take even less time than that.

We looked at the compensation of dozens of CEOs working for some of the biggest S&P 500 companies to figure out how long it would take them to get to the median employee's annual compensation based on data filed with the Securities and Exchange Commission for the 2024 fiscal year.

We then ranked the executives from longest to shortest time, rounded to the nearest minute. The CEOs of Starbucks, McDonald's, and several other retail companies ranked high on the list.

Below are the 20 that took the shortest length among the CEOs we looked at.

20: Thermo Fisher Scientific CEO Marc Casper: 21 hours and 46 minutes

CEO compensation: $30,449,599

Median worker compensation: $75,643

19. Microsoft CEO Satya Nadella: 21 hours and 27 minutes

CEO compensation: $79,106,183

Median worker compensation: $193,744

The financial filing said that the company identified the median employee using workers as of the last day of its fiscal year but didn't include people who joined the company as part of the acquisition of Activision Blizzard.

18. Uber CEO Dara Khosrowshahi: 20 hours and 40 minutes

CEO compensation: $39,408,629

Median worker compensation: $92,958

"Our median employee is an entry level Operations Manager, based in Hong Kong," the financial filing said.

17. Philip Morris CEO Jacek Olczak: 20 hours and 23 minutes

CEO compensation: $20,237,916

Median worker compensation: $47,109

"Approximately 58% of our employees are located in non-OECD countries, which tend to be lesser developed countries with lower wages than OECD countries," the financial filing said.

16. Home Depot CEO Edward Decker: 19 hours and 48 minutes

CEO compensation: $15,574,678

Median worker compensation: $35,196

"Our median-paid associate for Fiscal 2024 was an hourly employee in the U.S.," the financial filing said.

15. Citigroup CEO Jane Fraser: 19 hours and 44 minutes

CEO compensation: $31,142,602

Median worker compensation: $70,138

"The 'annual total compensation' of our median employee includes salary as of December 31, 2024, overtime pay, other fixed pay, incentive compensation, if applicable, and company-paid benefits," the financial filing said.

14. Chubb CEO Evan Greenberg: 18 hours and 22 minutes

CEO compensation: $30,138,094

Median worker compensation: $63,197

"The median employee is an accounts specialist based in the United States," the financial filing said.

13. IBM CEO Arvind Krishna: 16 hours and 56 minutes

CEO compensation: $25,143,682

Median worker compensation: $48,582

12. PepsiCo CEO Ramon Laguarta: 16 hours and 17 minutes

CEO compensation: $28,814,759

Median worker compensation: $53,551

11. Eaton CEO Craig Arnold: 15 hours and 34 minutes

CEO compensation: $22,597,466

Median worker compensation: $40,157

10. American Express CEO Stephen Squeri: 14 hours and 15 minutes

CEO compensation: $37,164,405

Median worker compensation: $60,421

9. Apple CEO Tim Cook: 13 hours and 28 minutes

CEO compensation: $74,609,802

Median worker compensation: $114,738

"We offer a wide range of benefits to our global employee population, and we are committed to paying our employees competitively and equitably based on their role," the financial filing said.

8. Disney CEO Bob Iger: 11 hours and 44 minutes

CEO compensation: $41,122,670

Median worker compensation: $55,111

"The median Disney employee works in a full-time hourly role in parks and has been with the Company for over seven years," the financial filing said.

7. Walmart CEO Doug McMillon: 8 hours and 59 minutes

CEO compensation: $26,968,924

Median worker compensation: $27,642

6. McDonald's CEO Chris Kempczinski: 8 hours and 25 minutes

CEO compensation: $18,195,263

Median worker compensation: $17,492

"Our median employee for 2024 is a restaurant crew employee located in Poland," the financial filing said.

5. Accenture CEO Julie Sweet: 7 hours and 46 minutes

CEO compensation: $24,915,146

Median worker compensation: $22,106

"Because of the geographical distribution of our workforce, our compensation program reflects many factors to determine how we compensate our employees in different countries around the world," the financial filing said.

4. GE Aerospace CEO Larry Culp: 6 hours and 51 minutes

CEO compensation: $88,954,586

Median worker compensation: $69,553

"As a result of the employee population changes in connection with the spin-off of GE Vernova in April 2024, we determined that a new median employee should be selected," the financial filing said, which also said, "General Electric Company operates as GE Aerospace."

3. TJX Companies CEO Ernie Herrman: 5 hours and 51 minutes

CEO compensation: $22,222,769

Median worker compensation: $14,857

The financial filing said the "median employee for purposes of our pay ratio estimate was a part-time hourly retail store Associate" for the 2024 fiscal year.

2. Coca-Cola CEO James Quincey: 4 hours and 25 minutes

CEO compensation: $28,002,284

Median worker compensation: $14,144

The financial filing said that "employees in flexible, part-time roles, such as certain employees at retail stores operated by Costa Limited, our coffee business, lower the annual total compensation for our median employee."

1. Starbucks CEO Brian Niccol: 1 hour and 19 minutes

CEO compensation: $97,813,843

Median worker compensation: $14,674

"Partners frequently work in flexible, part-time roles, which has the effect of lowering the annual total compensation for our median employee," the financial filing said.

• The lowest-income households have experienced the highest level of inflation in recent years.
• Lower-income people spend much of their income on items like food and housing, for which costs have spiked.
• Moderating rental rates and steady wage growth could help these households feel relief.

Rising prices across the US economy have impacted every American over the past few years, but the lowest-income households have faced the greatest burden.

The dynamic is reflected in the chart below, which shows low-income inflation increases outpacing those for the other four quintiles since 2006, and over a nearer-term timeframe.

From the end of 2005 through June 2024 — the latest available data — the lowest-income cohort saw prices increase 64%, outpacing the roughly 57% seen by the highest-earning Americans, according to Bureau of Labor Statistics data. The same discrepancy exists on a nearer-term basis, with low-income inflation growth exceeding that of top earners by nearly two percentage points since 2020.

This is largely explained by the fact that lower-income people spend the highest percentage of their earnings on consumer goods that have seen some of the biggest price increases over time, most notably food and housing.

"Lower-income households spend more of their money on necessities, so if categories like food, housing, and utilities are experiencing faster price growth, these households will be hardest hit," Elizabeth Renter, senior economist at NerdWallet, told Business Insider.

What the future holds

One economist says lower-income Americans could struggle to see relief due to a lack of spending-habit flexibility.

Jeff Horwich, senior economics writer for the Minneapolis Fed, said lower-income individuals are more hamstrung in their ability to pivot to lower-priced goods. While higher-income people might shop more at a dollar store when prices rise, their lower-income counterparts who already frequent these stores have limited alternatives.

"When times get tight, they have less wiggle room to change their spending," Horwich said of lower-income individuals.

Persistently high food prices also present a continued headwind. They're expected to keep rising, albeit at a slower rate than they did last year, according to Department of Agriculture data from December.

Another issue facing lower-income people is the Trump administration's plans to implement widespread tariffs on many or all imported goods. Renter said any related price increases could have the biggest impact on the lowest-income Americans, although she's skeptical that Trump will be as aggressive as some expect.

Despite these forces working against low-income people, moderating rent increases could provide some relief. Lowell Ricketts — a data scientist at the St. Louis Fed — said the moderating rent growth can be a positive, at least relative to higher-earning households, since lower-income Americans are more likely to rent.

"If some of that pressure in rents mitigate a bit, then that would be very helpful for low-income Americans to have more purchasing power," Ricketts said.

Still, Ricketts acknowledged that this rent-growth slowdown could be complicated by housing-supply constraints that reduce inventory and keep pushing prices higher.

Beyond that, wage growth could also play a role in offering relief — as long as it continues to exceed inflation, which it has over the past year as consumer-price expansion has moderated. Adding support to the possibility of more wage growth is the fact that layoffs across the US are low compared to historical levels.

Have you adjusted your spending habits to avoid high prices of certain goods or services? Are you willing to share your story? If so, reach out to this reporter at [email protected].

• Park City ski patrollers reached a deal with Vail Resorts on January 8 after a labor strike.
• Ski patrollers told BI they must work multiple jobs to survive in mountain resort towns.
• Seasoned patrollers say they may change jobs due to unsustainable wages and steep living expenses.

Days after a historic labor strike in Park City ended, America's ski patrollers are caught between their love of the slopes and the steep price of mountain resort living.

Kali Flaherty, for example, doubts she will ever own a home.

The 26-year-old works full-time in ski patrol at Colorado's Arapahoe Basin. For the past three winters, she has kept trails clear, stabilized injured skiers and snowboarders, helped prevent avalanches, and trained rookie patrollers.

Flaherty said it's her "dream job." But her $23 hourly pay isn't enough to cover living expenses, and she works shifts at a nearby healthcare clinic to make ends meet. She rents an apartment with a few roommates in Breckenridge, about 20 miles from Arapahoe Basin.

Like many ski patrollers, Flaherty is in a bind. The cost of living in resort towns like Breckenridge, Vail, Aspen, and Park City continues to skyrocket, pushing out the employees who keep them operational. Being close to these areas is also key for employees because of high commuting costs and dangerous winter road conditions. Several patrollers told Business Insider that they struggle to afford housing, groceries, and gas, let alone build savings. Some expect they will have to switch industries for higher-paying work, and many current patrollers work multiple jobs to stay afloat.

These financial challenges have culminated in labor disputes. On January 8, Vail Resorts granted the Park City Professional Ski Patrol Association a $2 raise for entry-level patrollers — from a $21 hourly pay floor to a $23 hourly pay floor — and agreed to improve benefits . The deal followed a weekslong patroller strike during the busy holiday season.

Meanwhile, ski patrollers at Arapahoe Basin, where Flaherty works, are voting to formalize their union this month. Several other patroller groups at Vail Resorts and Alterra Mountain Company-owned mountains have unionized or taken collective action in the past few years.

Flaherty wants to be a ski patroller for her entire career — but she said it comes with sacrifices. She hopes Park City's contract helps make it possible for employees like her to build financially stable lives near resort towns.

"I don't see myself being able to buy property up here, which is always the dream," she said. "I would love to not be living with roommates my entire life, but the way that I make money as a patroller now, that's my reality."

Representatives for Vail and Alterra — the parent organizations of the ski resorts where the patrollers BI interviewed work — did not respond to comment requests.

Ski patrollers are facing steep expenses and low wages

The average ski patroller makes $21.56 an hour, per the job platform Indeed. Compensation varies based on years of experience, level of medical training, and safety certifications, said the ski patrollers Business Insider interviewed. For example, an EMT or paramedic license might add a few dollars to patrollers' wages. Patrollers' benefits vary by resort, though most receive free lift tickets — which can range from $120 to $300 a day — as part of their role.

For many patrollers, finding affordable housing in the markets where they work is challenging. The five patrollers BI spoke with rent with several roommates, or have to commute long distances to work. The median monthly rent in a town like Breckenridge is $5,000, per Zillow, a price that exceeds some ski patrollers' total monthly income.

Groceries and gas are also costly in many mountain areas because of limited stores and the high transportation costs for goods. A dozen eggs is just over $4 in Denver, but nearly $7 in Breckenridge.

Kyle Eveland, 24, makes $23.28 an hour as a second-year ski patroller at Breckenridge Resort in Colorado. Before he reports to the mountain every morning to set up avalanche mitigation equipment, Eveland said he shovels snow for a nearby property. He works a full-time construction job over the summer, when the ski resort is closed, and recently began a part-time role pumping concrete between his patrol shifts.

"I would love to do what I love every day and take the sacrifice of not making a lot of money doing that," he said, adding "I pretty much live paycheck to paycheck in the winter. It would be super, super tight if I just patrolled."

Right now, Eveland lives in Breckenridge with seven other roommates. He said he took a pay cut when he decided to join ski patrol, despite the job requiring significant training. He previously worked at Breckenridge as a chairlift operator. Eveland said he may need to leave his patrolling job if he wants to afford a down payment or support a family in the future.

"I got my EMT license and that got me a single dollar raise," he said.

Tate Finigan's experience is similar. The 26-year-old recently began his third season as a ski patroller in Park City. Finigan commutes from Salt Lake City, over a 30-mile drive, every day because he can't afford housing in Park City. When he's not on the mountain, Finigan babysits and walks dogs, and previously picked up shifts as a bartender.

"It's been really hard to try and live in this community that we all so badly want to be a part of," he said.

In a profession that relies on experience, seasoned patrollers aren't sure they can stay

Ski patrolling requires specialized skills: sharp ski competence, outdoor survival and avalanche certifications, and medical expertise. The ski patrollers BI interviewed said that this experience is honed over time, meaning that seasoned patrollers are often best at training rookies and handling on-mountain crises.

Mike Reilly, 33, has been a ski patroller at Park City for six years. He cares about his job, but he isn't sure how long he will remain on staff. Each year, Reilly said it becomes more challenging to pay his bills — even with his second job as a barista. Reilly said that cost of living challenges mean many experienced ski patrollers like him are considering leaving for second, more lucrative careers. He recently finished nursing school.

"I went to nursing school, but that was really out of desperation," he said. "I would much rather patrol and remain a career-patroller, if that meant I could afford to pay rent and not work 20 days in a row."

Max Magill is a 10-year ski patroller at Park City and president of United Mountain Workers, a union that represents ski patrollers, lift mechanics, and other resort employees across the Western US. He told BI that efforts to raise patroller wages are happening across America's ski industry because the job isn't financially sustainable long-term. After a decade in the job, Magill said he's still working side gigs and living paycheck to paycheck.

"The operation of big Western ski resorts with avalanche terrain really does hinge on the work of these experienced ski patrollers," he said. "The guest experience would be completely different if there were not experienced ski patrollers being retained at these resorts."

After the Park City deal was struck, Magill said in a press statement that "the victory will help raise employment standards for all ski industry employees."

To be sure, high living expenses impact other mountain employees besides ski patrollers. Reilly said food service, lift operator, lift mechanic, and ticket scanner jobs are also key to keeping resorts open and safe. Many of these employees make similar wages to ski patrollers.

Flaherty isn't sure she can stay on patrol forever, but she's hoping to keep clicking on her skis for as long as she can. It helps to know others in her profession are also working toward a better future.

"Our patrollers have come together more than ever before," she added. "It has created a positive environment to know that we all have each other's backs."

Do you live in or near a resort town? Are you open to sharing how you manage expenses? If so, reach out to this reporter at [email protected].

• Small-business optimism may rise after Trump's election win, potentially boosting hiring intentions.
• Optimism surged post-2016 election, with small businesses planning to hire more employees.
• Improved labor market conditions could enhance consumer sentiment and boost wages.

Welcome to the vibe-spansion.

Yes, that's a portmanteau of vibes and expansion, and it's the upbeat version of its better-known cousin, the vibecession.

The term vibecession, a play on the word recession coined by content creator Kyla Scanlon, has been used to describe how people have felt about the economy for the last few years. While the National Bureau of Economic Research hasn't declared an official recession during that time, as there's been no significant decline in employment and consumer spending, inflation and a floundering job market have left consumers feeling downcast about the economy.

That could be about to shift.

That's because the optimism of small-business owners, and their intentions to hire more employees, are probably set to rise after Donald Trump's win in the presidential election earlier this month, with the president-elect promising to cut taxes and regulations.

"Small business owners lean Republican," said Oliver Allen, a senior US economist at Pantheon Macroeconomics, in a November 12 note.

Numbers from the National Federation of Independent Businesses' November survey aren't in yet, but the 2016 election period saw a substantial shift in small-business optimism. Even with higher interest rates and a slightly slowing economy, one would expect some sort of positive jolt to outlooks, experts say.

"After Donald Trump was elected the 45th President in November 2016, the National Federation of Independent Businesses (NFIB) small business optimism index skyrocketed. It was truly a reflection of 'animal spirits' coming to life and this behavior is likely to be repeated," Goldman Sachs' Chief US Equity Strategist David Kostin wrote in a November 18 client note. "We expect an improving small business operating environment will boost the sentiment and spending of SMBs in 2025 and lift the earnings and valuation of stocks with revenues tied to that spending."

Admir Kolaj, an economist at TD Economics, agrees.

"Although the economy is on different footing now and facing a different set of challenges, we anticipate we're likely to see an improved mood among small business owners to cap off the year," he said in a November 12 note.

NFIB data shows that optimism bleeds through to concrete actions. Hiring intentions also jumped after the 2016 election, and they have tracked closely with actual job openings.

Of course, job openings had already been on the rise in the years leading up to 2016, while they are falling today. But the expected jump in optimism, and the presumptive knock-on effect in hiring intentions, could turn that around.

With inflation having cooled off and interest rates starting to fall, more job opportunities flooding the market could be what consumers need to feel better about the economy.

When there are more jobs available, the labor market becomes more employee-friendly, and workers are able to command higher wages. Higher pay could help consumers feel like they're finally able to get ahead, assuming it doesn't fuel higher inflation again with many of the pandemic supply chain hurdles now out of the way.

Workers will also feel less trapped in their current jobs when openings are more abundant, according to Daniel Zhao, lead economist at Glassdoor. About two-thirds of workers feel "stuck," he said. With openings falling since 2022, the number of quits has dropped dramatically.

"Once the job market heats up again, that will open a relief valve to release the bottled up pressure, by giving workers the option to quit in favor of better options on the market," Zhao wrote in a November 19 report. "For the time being, employers may be benefiting from unusually low turnover rates, but they shouldn't be complacent—a wave of revenge quitting is on the horizon."

The turnaround may not be easy. Unemployment has been trending upward, and the tough credit environment for small businesses may mean that continues. Uncertainty stemming from Trump's tariff proposals could also hamper hiring and business investment.

But the idea that a rosier outlook from small-business owners could boost labor conditions is plausible. The past data is there to support it. Whether the post-election bump in optimism will be enough to spark a hiring spree and improve consumers' attitudes this time around will become evident in the months ahead.

The vibe-spansion could be upon us.