U.S. Education Department to Resume Collections on Defaulted Student Loans
The U.S. Education Department is set to restart the collection of federal student loans in default, affecting over 5 million borrowers. Starting May 5, 2025, the department will begin garnishing wages for those who have fallen behind on their payments. This marks the first time since the pandemic that collections will resume after a long pause. Borrowers are advised to prepare for the implications of involuntary collections, which could include wage garnishment and withholding of tax refunds. The move has been met with mixed reactions, with some officials emphasizing the need for accountability, while others criticize the resumption of stricter penalties under the current administration. Borrowers are encouraged to stay informed about their loans as the collections process unfolds.
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