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News in English (USA) / 11.05.2025 / 16:00

Resumption of Student Loan Collections Poses Challenges for Borrowers

In a significant policy shift, the Trump administration has resumed the collection of defaulted federal student loans after a prolonged hiatus. This move could have severe consequences for millions of borrowers, especially as many are currently facing financial difficulties and soaring delinquency rates. Approximately 5.3 million borrowers in default may see their wages garnished, which has raised concerns about the potential for a broader economic impact. With student loan collections restarting amidst a rising number of borrowers struggling to keep up with payments, experts warn that this transition marks the beginning of a difficult new era for college students and non-traditional borrowers alike. Advocacy groups highlight that the resumption of collections could lead to plummeting credit scores and increased financial distress. As borrowers navigate these changes, there is urgent discourse around the need for support and potential solutions for those caught in the student loan crisis.
Axios, MSNBC News, vox.com, USA Today, Yahoo, LAist, Forbes, 6abc Philadelphia, WSAZ, CBS News