US to start collections on student-loan defaulters

The Education Department took its first step Wednesday toward docking the pay of 41,000 federal workers, two-thirds of them military employees, who have defaulted on an estimated $65 million in student loans.

Agency officials handed representatives of federal departments thick manila envelopes containing the names of employees believed not to have paid back their student loans. One official said that unless the employees start voluntary repayment, up to 15 percent of their pay or pensions may be withheld starting later this year.