The federal government is set to resume collections on federal student loans in default as of May 5, after a five-year pause initiated due to COVID-19. With over 5 million borrowers in default, financial institutions will be able to collect funds from various sources, including wages and tax refunds. Education Secretary Linda McMahon emphasized the importance of helping borrowers return to repayment for their financial health. Additionally, many borrowers continue to face challenges with pending income-driven repayment plans as legal hurdles delay their implementation.
Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment.
The collections of federal student loans were paused during President Trump's first term as a temporary relief measure in response to the COVID-19 pandemic.
Collection
[
|
...
]