Trump Administration Resumes Collection of Defaulted Student Loans After a 5 Year Hiatus
Donald Trump‘s administration is kicking off collection of defaulted student loans as of Monday (May 5).
After a five-year hiatus, the U.S. Department of Education will resume collections of defaulted student loans this week, via NPR.
There are more than 42.7 million student loan borrowers in the United States, who owe a collective $1.6 trillion.
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The Department of Education says that more than 5 million have not made a payment in the past year, and that number is expected to grow as an additional 4 million borrowers are approaching default status.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” U.S. Secretary of Education Linda McMahon said in a statement.
“Debt cannot be wiped away. It just ends up getting transferred to others,” press secretary Karoline Leavitt also told reporters.
“The government can and will collect defaulted federal student loan debt by withholding money from borrowers, tax refunds, federal pensions and even their wages…if you take out a loan, you have to pay it back.”
The Education Department announced in April that it would begin notifying borrowers who are in default via email, urging them to make a payment or to enroll in a repayment plan, and referring them to this government website with information about how to do so.
The Department said it would begin referring borrowers who remain in default to a collections program run by the Treasury Department by May 5 for involuntary collection.
Involuntary collection means the government can take wages, tax refunds, portions of Social Security checks and other benefit payments in order to pay back student loans.
Borrowers can check the status of their loan at studentaid.gov.
Payments were initially paused by the first Trump administration in March 2020 amid the pandemic. The Biden administration then extended the pause, giving students relief from the rising costs of college.
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