The Education Department has resumed collections on defaulted federal student loans as of October 2023, ending a five-year pause that began during the Covid-19 pandemic. Approximately 5.3 million borrowers are in default, with collections being executed through the Treasury Offset Program, which allows the government to reclaim tax refunds and other payments owed to individuals. Borrowers will soon receive emails regarding their status and upcoming steps, including potential administrative wage garnishment, potentially affecting their credit scores amid concerns about loan repayment.
The Education Department will begin involuntary collections through the Treasury Offset Program to recover defaulted student loans, affecting 5.3 million borrowers.
The pause on loan collections, initiated during the pandemic, drew to a close as the Biden administration resumes payments after multiple extensions.
Collection
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