The Trump administration has restarted collections on defaulted student loans after a five-year hiatus largely due to COVID-19. As of May 5, approximately 195,000 borrowers received notifications about the potential loss of federal benefits, such as tax refunds and Social Security checks, if they remain in default. By summer's end, over 5 million borrowers may face wage garnishment. The Department of Education urges borrowers to seek payment plans or loan rehabilitation to avoid severe penalties associated with prolonged defaults.
Preston Cooper, a senior fellow at the American Enterprise Institute, noted that some borrowers might not see the consequences of default until it's too late, emphasizing the importance of timely communication from the Department of Education.
The Department of Education stated that starting on May 5, 195,000 defaulted student-loan borrowers began receiving 30-day notices warning them of potential withholding of their federal benefits.
Collection
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