Collection of defaulted student loans to restart May 5
WASHINGTON – Since the pandemic, federal student loan borrowers have been mostly protected from the harshest consequences of not paying back their loans. That's about to change, and quickly. Linda McMahon, the secretary of the U.S. Department of Education, said the federal government will resume involuntary collections for borrowers in default on May 5. In two weeks, loan holders will start the process of taking money from the paychecks of borrowers who've missed their payments for 270 days or more. They'll also start moving to collect from other federal payments, including tax refunds and Social Security benefits. The change, which McMahon unveiled on April 21 and has been expected for months, represents the last major cog in the wheel of the U.S. student loan repayment system to start spinning again since the coronavirus pandemic. Collections for defaulted borrowers – of which there are more than five million – have been paused since March 2020. Under former President Joe Biden, monthly student loan bills resumed…
21 Apr 00:00 · Inlandnewstoday