The U.S. Department of Education will resume collections on defaulted student loans starting May 5, impacting millions of borrowers. After a five-year pause, more than 10 million borrowers are at risk of wage garnishment and other collection efforts. According to NPR, over 5 million borrowers have not made a payment in the past year, and an additional 4 million are nearing default.
The department will notify borrowers in default via email, urging them to make payments or enroll in repayment plans. If they remain in default, they will be referred to a collections program run by the Treasury Department. As the collection efforts resume, the Education Department plans to restart the Treasury Offset Program and administrative wage garnishment after a 30-day notice period.
The Treasury Offset Program allows the government to intercept tax refunds and Social Security payments, while administrative wage garnishment enables seizing a portion of a borrower’s income without a court order.
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