The Education Department will resume collections on defaulted federal student loans from May 5, 2024, after pausing throughout the COVID-19 pandemic. Currently, 5.3 million borrowers are in default, facing potential wage garnishments and offsets from government payments. This decision, supported by Education Secretary Linda McMahon, aims to end taxpayer support of defaulted loans, however, it has drawn criticism for being detrimental to working families. The cessation of leniency follows multiple attempts by the Biden administration to provide loan forgiveness, stymied by court rulings.
The Trump administration's announcement marks an end to a period of leniency that began during the COVID-19 pandemic.
American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies, said Education Secretary Linda McMahon.
The decision to send debt to collections drew criticism from advocates, who called it cruel and unnecessary for working families.
Borrowers who don't make payments for nine months go into default, and collections will start after the grace period ends.
Collection
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