Student Loan Payments Set to Resume Soon: What You Need to Know

( The Hill )— On Monday, the Department of Education stated that they will resume collecting payments on federally guaranteed student loans that have gone into default starting May 5th. This move could affect numerous borrowers, with potential wage garnishments for many employees.

The federal agency reported that over 5 million borrowers have been in default, failing to make their monthly payments, for more than a year, with some cases extending beyond seven years.

Student loans that were defaulted stopped being collected in March 2020, when they were suspended due to the economic turmoil caused by the beginning of the coronavirus pandemic.

"American taxpayers will no longer bear the burden of serving as guarantors for unwise student loan policies. The Biden administration provided misleading information to borrowers; neither the executive branch constitutionally possesses the power to erase debts, nor do these loan amounts vanish automatically. Billions of dollars have already been transferred to taxpayers," stated Education Secretary Linda McMahon.

Moving ahead, the Department of Education, working alongside the Department of Treasury, will manage the student loan program conscientiously and within legal bounds. This approach aims to assist borrowers as they resume payments—not only for their personal financial well-being but also for the betterment of our country’s economic future," McMahon stated additionally.

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The Treasury Offset Program enables the government to hold back federal funds, like tax refunds, from those who are delinquent. Following a 30-day notification period, the federal authorities may also initiate wage garnishment for the individual owing money.

The notification stated that borrowers who have defaulted will receive communication prior to the May deadline and are urged to reach out to the Default Resolution Group to either enroll in an income-driven repayment plan or register for loan rehabilitation.

The department stressed that only 38 percent of borrowers are in repayment and up to date on their loans out of the more than 45 million individuals with student loan debt.

President Donald Trump has frequently criticized former President Joe Biden regarding his approach to student loans, emphasizing that the possibility of loan forgiveness is now obsolete.

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