Washington (AP) – Education Department will begin collections next month Student loan The default includes potentially pay decorations for millions of borrowers, officials said Monday.
Currently, around 5.3 million borrowers are defaulting on federal student loans.
Trump administration The announcement is to end the period of generosity that began during the Covid-19 pandemic. Since March 2020, federal student loans, including default loans, have not been referred to collection.
“U.S. taxpayers are not forced to act as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said.
Starting May 5, the department will begin unwilling collection through the Ministry of Finance’s offset program. This withholds government payments, from people with past debt to government, including tax refunds, federal salaries and other benefits. After 30 days of notification, the department will also begin awarding wages for default borrowers.
Many borrowers are already dressed up The obligation to arrive due.
2020, President Donald Trump We have suspended federal student loan payments and interest accrual as a temporary relief measure for student borrowers. Payment suspensions were extended multiple times by 2023, and the final grace period for loan repayment ended in October 2024. That meant tens of millions of Americans had to start paying again.
Borrowers who do not make payments for nine months default. This is reported with a credit score and can be taken to the collection.
In addition to borrowers who have already defaulted, around 4 million people are 91-180 days behind on loan payments. Less than 40% of all borrowers, all of whom are up to date on student loans, department officials said.
President Joe Biden oversaw student loan cancellations for more than 5 million borrowers. in spite of Supreme Court rejection Of his signature proposals for broad relief, he waived more than $183.6 billion in student loans through an expanded forgiveness program.
In a statement Monday, McMahon said Biden had gone too far.
“From now on, the Ministry of Education will work with the Ministry of Finance to take responsibility and shake up the student loan program in accordance with the law. This means helping borrowers return to repayment for their financial health and the national economic outlook,” she said.
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