The Department of Education has resumed collections on defaulted federal student loans after a pause due to the COVID-19 pandemic, affecting about 5.3 million borrowers. Education Secretary Linda McMahon stressed the need to reform the higher education finance system, which has burdened students with debt and elevated tuition rates. Starting this month, borrowers will receive notices about potential garnishments of wages and federal benefits. McMahon also highlighted institutions' shared duty to ensure students can successfully repay their loans and succeed in the labor market, emphasizing accountability and transparency in higher education.
"As we begin to help defaulted borrowers back into repayment, we must also fix a broken higher education finance system that has put upward pressure on tuition rates without ensuring that colleges and universities are delivering a high-value degree to students."
"For too long, insufficient transparency and accountability structures have allowed US universities to saddle students with enormous debt loads without paying enough attention to whether their own graduates are truly prepared to succeed in the labor market."
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