Department of Education to resume collecting student loan payments. Here's what to know
Starting May 5, the U.S. Department of Education will resume collections of defaulted student loans.
The Department of Education says it had not collected payments since March 2020, and that over five million borrowers have not made a payment within the last year.
The initiative will be paired with a comprehensive communications and outreach campaign in order to ensure borrowers understand how to return to payments or get out of default, says the U.S. Department of Education.
Currently, there are over 42.7 million student loan borrowers in the U.S., who owe a collective debt of $1.6 trillion, and that number is expected to increase as an additional four million borrowers are nearing default status, according to a U.S. Department of Education press release.
Over the next two weeks, the Department of Education says it will be notifying borrowers who are in default via email, recommending that they contact the Default Resolution Group to make a payment or enroll in an income-driven repayment plan.
On May 5, the Department of Education will then begin referring borrowers who remain in default to the Treasury Offset Program within the U.S. Department of the Treasury.
Later in the summer, Federal Student Aid (FSA) will send out required notices that administrative wage garnishment will begin.
The Department of Education also says that it will authorize guaranty agencies so that they can begin involuntary collections activities on loans under the Federal Family Education Loan Program.
Presley Bo Tyler is a reporter for the Louisiana Deep South Connect Team for Gannett/USA Today. Find her on X @PresleyTyler02 and email at PTyler@Gannett.com
This article originally appeared on Shreveport Times: Will the Department of Education resume student loan collections?
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