Latest news with #OfficeofFederalStudentAid
NZ Herald
23-05-2025
- Politics
- NZ Herald
US Education Department must reinstate nearly 1400 fired workers
Joun also agreed that the coalition of states, school districts and unions – who filed separate lawsuits that have been consolidated – are likely to suffer irreparable harm as the cuts result in financial uncertainty, impeded access to vital knowledge and the loss of essential services provided by the Office of Federal Student Aid and the Office for Civil Rights. Department employees, university leaders, state education agencies, union members and educators provided testimony in support of the coalition. 'This decision is a first step to reverse this war on knowledge and the undermining of broad-based opportunity,' said Randi Weingarten, president of the American Federation of Teachers, one of the groups suing the department. 'For America to build a brighter future, we must all take more responsibility, not less, for the success of our children.' The Education Department denounced Joun's ruling, saying it was not in the best interest of American students and families. The agency plans to challenge the order on an emergency basis. 'Once again, a far-left judge has dramatically overstepped his authority, based on a complaint from biased plaintiffs, and issued an injunction against the obviously lawful efforts to make the Department of Education more efficient and functional for the American people,' Madi Biedermann, deputy assistant secretary for communications at the department, said in an email. 'President Trump and the Senate-confirmed Secretary of Education clearly have the authority to make decisions about agency reorganisation efforts, not an unelected Judge with a political ax to grind.' The ruling directs the Education Department to file status reports on their progress complying with the order within 72 hours and weekly after that until the department is restored to 'the status quo prior to January 20, 2025'. Sheria Smith, president of AFGE Local 252, which represents Education Department employees, welcomed the order. Smith, an attorney in the Office for Civil Rights who was herself laid off, said she expects all impacted members to have their jobs restored. 'Today's order illustrates that the work our members performed was critical to states, school districts, students, and our fellow citizens – despite this administration's statements to the contrary,' she said in a statement. The ruling arrives a day after the National Association of Student Financial Aid Administrators released a national survey of members who said the staff cuts at the department have led to breakdowns that could affect the processing of aid this year. About 59% of the 909 financial aid offices surveyed reported delays in processing timelines and responsiveness since the layoffs. Hundreds of staff in the Office of Federal Student Aid, which is responsible for administering student loans and Pell grants, have been let go. In April, college and university financial aid officers reported they were experiencing disruptions that slowed their ability to calculate financial aid offers and get timely answers from the department about everything from adding academic programs to remaining eligible to receive federal aid, the Post found. 'This is a huge rebuke and powerful ruling for all of us, but in some ways a lot of the damage has been done,' said Rachel Gittleman, who worked in Federal Student Aid's ombudsman office before the cuts. 'Even if we go back, will we be able to do the work we were doing?' Gittleman, who helped pull together employee declarations in the states' case, said many of her colleagues have been traumatised by the experience and worry about returning to a hostile work environment only to be let go again. One attorney at the agency's Office for Civil Rights who was laid off said she looks forward to returning to her job and hopefully resuming work on cases that she was forced to abruptly abandon. 'I think many of us will go back in the hopes that we will be able to be reassigned to the cases that we already have and we hope to be able to continue working on and get some resolution for people,' said the attorney, who spoke on the condition of anonymity for fear of retribution. 'We want to do the work that Congress directed us to do.'
Time of India
06-05-2025
- Business
- Time of India
US restarts student loan collections: 10 things you need to know
Here are the 10 things you should know 1. When did collections resume? 2. What happens if I'm in default? 3. Can I avoid collections by enrolling in a repayment plan? 4. How do I apply for an income-driven repayment plan? 5. What support tools are available? 6. Will there be any more loan-forgiveness programmes? 7. Why is the Department restarting collections now? 8. What is the current state of student-loan debt? 9. How many borrowers are impacted? 10. Who else is involved in the outreach effort? The US Department of Education has announced that, as of Monday 5 May 2025, it will resume all collections activities on defaulted federal student loans , the first time since March 2020 that borrowers in default will face involuntary repayment measures. The pause on collections, implemented at the outset of the Covid-19 pandemic and upheld by the Biden administration until October 2023 for general repayments, had left millions of borrowers in limbo, with little clarity on how to return to good standing. Now, amid record-high delinquency rates and more than $1.6 trillion in outstanding debt, the Department says it is renewing its efforts both to protect taxpayers and to guide borrowers back into manageable repayment Secretary Linda McMahon framed the move as a restoration of fairness: 'American taxpayers will no longer be forced to serve as collateral for irresponsible student-loan policies,' she said. The Department has paired the restart of collections with a comprehensive communications and outreach campaign, promising clearer guidance on income-driven repayment plans loan rehabilitation and a new, streamlined set of online tools. At the same time, guaranty agencies will be authorised to begin involuntary collections on Federal Family Education Loan (FFEL) Programme loans, and the Treasury Offset Programme will once more divert tax refunds and federal salary payments to cover unpaid advocates warn that the resumption of collections could impose significant strain on households already stretched by inflation and rising living costs. Credit-bureau data show that roughly one in five borrowers is 'seriously delinquent' 90 days or more past due and that default can cost an average credit-score loss of 63 points, rising to 175 points for those previously deemed 'super-prime'. As borrowers face wage garnishment, tax-refund seizures and the threat of Social Security offsets, many will need to act swiftly to avoid long-term damage to their financial on defaulted federal student loans restarted on Monday May 5. Borrowers in default should already have received emails from the Office of Federal Student Aid (FSA) notifying them of these you remain in default, the Treasury Offset Programme can withhold your federal tax refunds and up to 15% of your disposable federal salary or benefit payments (including Social Security).Yes. You may contact the Default Resolution Group to make monthly payments, sign up for loan rehabilitation (making a set number of payments to erase default status), or enrol in an income-driven repayment (IDR) Department says it will begin processing IDR plan applications (including Income-Based Repayment, Income-Contingent Repayment and PAYE) next month. A simplified online IDR process will eliminate annual income has launched a new Loan Simulator, an AI Assistant ('Aiden'), extended servicer call times and enhanced online resources at to help you select and enrol in the best plan for your Department has stated explicitly that there will be no further mass loan-forgiveness schemes. Any future relief will be targeted, not to Secretary McMahon, resuming collections protects US taxpayers—who finance federal student loans—from shouldering unpaid balances, and encourages borrowers to restore their credit and financial 42.7 million borrowers owe more than $1.6 trillion. Over 5 million have not made a payment for more than a year and 4 million are in late-stage delinquency (91–180 days past due).Nearly 10 million borrowers could be in default within months if current trends continue — almost a quarter of the entire federal-loan will partner with states, institutions, financial-aid administrators, college-access organisations, servicers and other stakeholders to ensure borrowers receive clear, consistent information and support.
Yahoo
05-05-2025
- Business
- Yahoo
Student loan borrower says "we're kind of drowning" as collections begin
The Department of Education says federal student loan borrowers who do not pay on time could damage their credit scores and even have their wages garnished beginning today, May 5 — causing challenges for some of the more than 5 million borrowers who are in default and struggling to get answers about their loans. "I don't think anyone takes out a loan with the intention of not paying it back. It's how easily you can pay it back, that's the problem," said Jana Heartwood, who owes more than $40,000 in student loans from her nursing degree. "We're kind of drowning as it is," she said. Two years ago, Heartwood's son was born with a medical condition, and to treat it, Heartwood exhausted her savings and took out money from her 401K. During the pandemic, student loan payments were put into forbearance, but when repayments resumed last year, Heartwood said she was never notified. After hearing of the agency's collection decision from a news report, Heartwood checked her account and said she was shocked. "I had no idea that my loans were delinquent at that point … I checked every email. I got statements that had a zero on it," she said. Persis Yu, an expert in student loan law, said steep job cuts at the Education Department, and steps to dismantle it, have left the loan system in disarray. "Borrowers cannot get answers from their servicers," said Yu. "Many of the services have hours-long call wait times in order to get just a simple answer about, 'How much do I owe? How do I pay my loan?'" After hours on the phone, Heartwood still had no clear answer on her loans, saying she can't afford to pay anything back right now. "It's not easy. Every week is hard," she said. "Every paycheck is immediately gone. It's gone before we even, you know, have it." The Department of Education's Office of Federal Student Aid (FSA) is restarting collections on defaulted federal student loan on Monday, as a new analysis shows that delinquency rates are higher than ever. Yu said there are no provisions that take into consideration when families have extraordinary circumstances, like having to pay for the medical care of a loved one. "It's an impossible standard for so many to meet and that's why so many borrowers do fall into default," she said. The Department of Education under President Trump blames the Biden administration. It told CBS News that because of "attempts to transfer student debt to every taxpayer, the student loan portfolio is in a dire financial state." Student loan pause and future payments Student loans payments and interest accruals were paused in March 2020 by President Trump during the COVID-19 pandemic. Former President Joe Biden extended the halt of payments multiple times before they resumed in October 2023. The Biden administration sought to eliminate some student debt but faced multiple legal challenges from the courts, including a 2023 ruling from the Supreme Court. During the Biden administration, more than 5 million borrowers had their debt erased through various initiatives. GOP lawmakers recently introduced legislation to overhaul the student loan repayment program, which includes eliminating the SAVE plan, created by the Biden administration in 2023. "Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation's economic outlook," Education Secretary Linda McMahon said in a statement last month, adding, "There will not be any mass loan forgiveness." Former treasury secretary on Trump's tariffs alarming American businesses Millions of Americans brace for federal student loan collections to resume Newark airport travel woes continue as staffing issues persist
CBS News
05-05-2025
- Business
- CBS News
Student loan borrowers struggle to pay, get answers as debt collections begin: "We're kind of drowning"
The Department of Education says federal student loan borrowers who do not pay on time could damage their credit scores and even have their wages garnished beginning today, May 5 — causing challenges for some of the more than 5 million borrowers who are in default and struggling to get answers about their loans. "I don't think anyone takes out a loan with the intention of not paying it back. It's how easily you can pay it back, that's the problem," said Jana Heartwood, who owes more than $40,000 in student loans from her nursing degree. "We're kind of drowning as it is," she said. Two years ago, Heartwood's son was born with a medical condition, and to treat it, Heartwood exhausted her savings and took out money from her 401K. During the pandemic, student loan payments were put into forbearance, but when repayments resumed last year, Heartwood said she was never notified. After hearing of the agency's collection decision from a news report, Heartwood checked her account and said she was shocked. "I had no idea that my loans were delinquent at that point … I checked every email. I got statements that had a zero on it," she said. Persis Yu, an expert in student loan law, said steep job cuts at the Education Department, and steps to dismantle it, have left the loan system in disarray. "Borrowers cannot get answers from their servicers," said Yu. "Many of the services have hours-long call wait times in order to get just a simple answer about, 'How much do I owe? How do I pay my loan?'" After hours on the phone, Heartwood still had no clear answer on her loans, saying she can't afford to pay anything back right now. "It's not easy. Every week is hard," she said. "Every paycheck is immediately gone. It's gone before we even, you know, have it." The Department of Education's Office of Federal Student Aid (FSA) is restarting collections on defaulted federal student loan on Monday, as a new analysis shows that delinquency rates are higher than ever. Yu said there are no provisions that take into consideration when families have extraordinary circumstances, like having to pay for the medical care of a loved one. "It's an impossible standard for so many to meet and that's why so many borrowers do fall into default," she said. The Department of Education under President Trump blames the Biden administration. It told CBS News that because of "attempts to transfer student debt to every taxpayer, the student loan portfolio is in a dire financial state." Student loan pause and future payments Student loans payments and interest accruals were paused in March 2020 by President Trump during the COVID-19 pandemic. Former President Joe Biden extended the halt of payments multiple times before they resumed in October 2023. The Biden administration sought to eliminate some student debt but faced multiple legal challenges from the courts, including a 2023 ruling from the Supreme Court. During the Biden administration, more than 5 million borrowers had their debt erased through various initiatives. GOP lawmakers recently introduced legislation to overhaul the student loan repayment program, which includes eliminating the SAVE plan, created by the Biden administration in 2023. "Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation's economic outlook," Education Secretary Linda McMahon said in a statement last month, adding, "There will not be any mass loan forgiveness."
Yahoo
02-05-2025
- Business
- Yahoo
Federal student loan collections to resume after 5 years
LAS VEGAS (KLAS) — On Monday, the Office of Federal Student Aid will resume collections on defaulted federal student loans for the first time in five years. The pause was first implemented in 2020 under the Trump Administration as a response to the COVID-19 pandemic and continued by the Biden Administration. As a result, the U.S. Department of Education will initiate involuntary collections for defaulted borrowers, a category to which 12 percent of those with student loans in Nevada fall, according to numbers from the Education Data Initiative. 'I'm definitely anxious, definitely concerned,' said Stephanie Gentry, a student, who likened her state of financial worry to a tsunami. 'I'm not really sure how it's all going to pan out.' Gentry, working toward her second degree while studying medical laboratory science at the College of Southern Nevada, described the years-long pause on federal loans as a relief, adding that she is unlikely to be able to afford repayments. 'I felt a glimmer of hope for some form of student debt cancellation,' Gentry said. According to the Education Data Initiative, proponents of cancelling student debt cite data that indicates would-be entrepreneurs are 11 percent less likely to start a new business when holding more than $30,000 in student loan debt. Opponents of cancelling student debt believe the action would lead to inflation and higher interest rates. One data model cited by the organization indicates that each dollar spent on student loan forgiveness could return between 2 and 27 cents in economic activity. Then there's the issue of fairness between those who successfully paid off their loans and those who haven't. Gentry believes it shouldn't be a determining factor. 'So what? If you had polio when you were a kid, should I also get polio?' she said, According to data from a 2024 UChicago Harris/AP-NORC Poll, 65 percent of those who have either paid off their student loans or never had student debt did not consider student loan forgiveness important, while 54 percent did. For her part, Gentry, a mother of three, hopes her children will have free college when the time for higher education comes. 'I want them to have everything they could possibly need,' she said. 'Because that's how you know you're in a healthy and well-structured society.' U.S. Department of Education estimates show that 25 percent of the federal student loan portfolio will be in default on their loans within months of resuming collections. That data indicates that more than 5 million monthly borrowers have not made a monthly payment in nearly a year. Four million borrowers haven't made a payment in 91 to 180 days, and have entered 'late-stage delinquency,' data show. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
