The U.S. Department of Education has announced that, starting May 5, 2025, it will resume collection efforts on defaulted federal student loans, ending the leniency period that began in March 2020 during the COVID-19 pandemic. Approximately 5.3 million borrowers are currently in default, and collection measures may include wage garnishment and federal payment offsets via the Treasury Department. AP News+2AP News+2AP News+2
This decision follows the Supreme Court's rejection of President Biden's broad student loan forgiveness plan. Despite this setback, the administration has canceled over $183.6 billion in student loans through targeted relief programs. AP News+2AP News+2AP News+2AP News+2AP News+2AP News+2
Borrowers in default can opt for loan rehabilitation to avoid garnishment. This process involves making nine consecutive, on-time payments to restore the loan to good standing. AP News+1AP News+1AP News
Education Secretary Linda McMahon emphasized the need for fiscal responsibility and legal adherence in managing the loan program. However, advocates have expressed concern that the resumption of collections could exacerbate financial hardships for many borrowers. AP News+1AP News+1
For more information and assistance, borrowers are encouraged to contact their loan servicers or visit the Federal Student Aid website.AP News+1AP News+1
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