After 5-Year Hiatus, Federal Student Loan Collections Set to Resume
After five years on hold, the U.S. Department of Education will resume collecting student loan payments on May 5. “American taxpayers will no longer be... Read More The post After 5-Year Hiatus, Federal Student Loan Collections Set to Resume appeared first on The Daily Signal.
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After five years on hold, the U.S. Department of Education will resume collecting student loan payments on May 5.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Secretary of Education Linda McMahon said in a statement.
The Office of Federal Student Aid has not collected defaulted loan payments since March 2020 amid the outbreak of the COVID-19 pandemic. Congress required students and parents to begin repaying their student loans in October 2023, but the Biden administration did not lift the collections pause.
Resuming collection protects taxpayers from bearing the cost of borrowers’ federal student loans, according to the Education Department.
Borrowers in default will receive emails over the next two weeks urging them to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. During the summer, the Office of Federal Student Aid will send required notices beginning administrative wage garnishment.
“The Biden Administration misled borrowers: The executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear,” McMahon said. “Hundreds of billions have already been transferred to taxpayers. 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—both for the sake of their own financial health and our nation’s economic outlook.”
Almost 43 million borrowers owe more than $1.6 trillion in student debt. More than 5 million borrowers have not made a monthly payment in more than 360 days and sit in default, according to the Education Department.
The post After 5-Year Hiatus, Federal Student Loan Collections Set to Resume appeared first on The Daily Signal.
