The federal student loan system is currently fraught with confusion and challenges, with 8 million borrowers awaiting legal clarity on repayment plans. Additionally, 9 million borrowers risk default as the extended payment pause due to COVID-19 ends. The ramifications of delinquency include credit damage and potential wage or tax refund seizure. Despite previous leniency, the return to normal repayment obligations has caught many borrowers off guard, highlighting the ongoing issues in the federal student loan framework, as resources tasked with oversight have been significantly reduced.
The federal student loan system is experiencing unprecedented uncertainty and total disarray as 8 million borrowers await legal decisions affecting their repayment plans.
The dire state of the federal student loan system sees 9 million borrowers potentially heading toward default, with many unaware of the impending payment obligations.
The Department of Education’s extended pause on student loan payments during the COVID-19 pandemic has left many borrowers caught off-guard by the return to normal repayment.
Once a borrower goes 90 days without a payment, they face serious consequences, including damage to their credit score and subsequent collection actions.
Collection
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