Washington D.C. - The U.S. Department of Education announced Monday the resumption of involuntary collections on federal student loans that are in default. This action marks the end of a pandemic-era pause on these collections, which included wage garnishments and offsets of federal payments, such as tax refunds.
The department stated that the move is necessary to ensure that borrowers meet their financial obligations and to protect taxpayer dollars. Borrowers who are in default are encouraged to contact the Education Department or their loan servicer to explore options for rehabilitation or consolidation, which could help them get out of default and regain eligibility for federal student aid. Several repayment plans are available, including income-driven repayment options that can lower monthly payments based on income and family size.
While the restart of collections may pose a challenge for some borrowers, the Department of Education emphasized its commitment to working with borrowers to find manageable repayment solutions. Resources and information are available on the department's website and through its loan servicer partners. Borrowers are urged to take proactive steps to understand their repayment options and avoid further negative consequences of default.
Student Loan Repayments for Defaulted Borrowers to Restart
The Department of Education announced that it will resume collecting on defaulted federal student loans. This means the government can again take money from borrowers' paychecks or tax refunds to repay these debts. These collections had been paused during the pandemic. Officials say the restart will help ensure borrowers meet their financial obligations.
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