The Trump administration will resume collections on defaulted student loans starting May 5, impacting 5.3 million borrowers. This marks the first collection activity in five years, and the federal government plans to start taking funds from tax refunds, Social Security, and wages. The Education Department warns that many more borrowers are nearing default due to delinquency, urging them to begin payments or seek income-driven repayment plans. Anxiety about repayment amounts and personal financial strain is prevalent among borrowers as the deadline approaches.
"Together, these actions will move the federal student loan portfolio back into repayment, which benefits borrowers and taxpayers alike," Education Secretary Linda McMahon said.
"Most borrowers they're not in danger of delinquency today, but in five months, they could be," says Scott Buchanan, executive director of nonprofit trade group Student Loan Servicing Alliance.
Collection
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