The federal government is restarting involuntary collections on defaulted student loans starting May 5, after a five-year pause.
The U.S. Department of Education and the Office of Federal Student Aid will once again begin collecting overdue payments through methods like wage garnishment, tax refund offsets, and reductions in Social Security benefits.
Millions of Americans could be affected by the move. Aissa Bañez with the Student Borrower Protection Center says the timing could worsen financial challenges for many. “This could not have come at a worse time,” she said. “For millions of families, they’re already having to navigate such uncertain economic times.”
Collections were put on hold during the 2020 pandemic, but federal officials say the pause cannot continue indefinitely. The White House has stated that widespread loan forgiveness is not a sustainable long-term solution.
Borrowers in default are encouraged to check their loan status and seek guidance from the Department of Education or loan servicers about possible options to avoid further financial penalties.
WSBs Ashley Simmons contributed to this story
Sign Up
