The Department of Education announced the resumption of collections on defaulted student loans beginning May 5, advising borrowers about possible referrals to debt collectors and income-based repayment options. Payment requirements were paused in March 2020 due to the pandemic, and the Biden administration attempted to implement debt forgiveness, which the Supreme Court has blocked. With over 42 million Americans holding student loans totaling more than $1.6 trillion, it's noted that many borrowers have not made payments in over a year and will soon be alerted about their status and repayment obligations.
The Department of Education stated it will resume collections on defaulted student loans on May 5, warning borrowers of potential referrals to debt collectors.
Under Biden's administration, efforts had been made to aid defaulted borrowers, but plans for loan forgiveness were struck down by the Supreme Court.
More than 42 million Americans owe a total of over $1.6 trillion in federal student loans, with over five million borrowers having deferred payments.
Borrowers who defaulted will receive emails soon detailing their status and may see automatic paycheck deductions in the coming summer months.
Collection
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