Beginning early next month, the roughly 5.3 million people who are currently in default on their federal student loans are going to be hearing from the Education Department.
“The government can and will collect defaulted federal student loan debt by withholding … tax refunds, federal pensions and even their wages,” White House press secretary Karoline Leavitt told reporters during an afternoon briefing on Tuesday.
She was reiterating an announcement by the Education Department that May 5 will be the official end of a period of leniency for those with federal student loan debt that began during the COVID-19 pandemic.
President Donald Trump paused both loan payments and interest accrual on those loans in March 2020 in response to the then-spreading pandemic, and former President Joe Biden extended that policy through October 2024.
In the interim, the Biden administration also tried to flat-out forgive many of those loans, only to see its efforts blocked by the courts.
On Monday, Education Secretary Linda McMahon said in a written statement that the policy of the second Trump administration couldn’t be more clear: “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.”
Over the next two weeks, those in default will receive emails informing them of the next steps and urging them to look into repayment options.
On May 5, the department will begin involuntary collection through the Treasury Department’s offset program, which withholds government payments — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government.
After a 30-day notice, the department also will begin garnishing wages for borrowers in default.
“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,” McMahon said.
Source: The Well News / Digpu NewsTex