Sign up for the Today newsletter
Get everything you need to know to start your day, delivered right to your inbox every morning.
Are you in default on your student loans? We want to hear from you.
Collections on loans in default began on Monday, marking an end to the five-year pause that began during the Covid-19 pandemic.
The Education Department began collecting loans in default on Monday, marking an end to the five-year pause that began during the Covid-19 pandemic. Are you one of the borrowers impacted?
On May 5, the department’s Office of Federal Student Aid (FSA) began involuntary collections through the Treasury Offset Program. The program collects income tax refunds and other government payments (like federal salaries, and even Social Security benefits) from people who have past-due debts to the government. The collected tax refunds and federal payments can be withheld and applied toward the defaulted student loan.
There are approximately 5.3 million borrowers in default on their federal student loans, according to the Education Department. A federal student loan is considered in default after 270 days (about nine months) of missed payments.
Advertisement:
Donald Trump paused collection on most federal student loans in March 2020, and Joe Biden continued the pause when he took office in 2021. The Biden administration extended the freeze several times, before resuming repayments in October 2023.
All borrowers in default will receive an email from FSA over the next 2 weeks about the resumed collections and next steps. Later this summer, FSA will send notices about administrative wage garnishment, a debt collection process where a federal agency can order an employer to withhold a portion of an employee’s wages to pay a debt owed to the agency.
Now that collections on defaulted loans have resumed, borrowers who fell behind could see their credit scores plunge, amid mounting worries about their ability to repay the loans.
Advertisement:
Are you one of the more than five million borrowers in default on your student loans? We want to hear from you.
Tell us by filling out the form or e-mailing us at [email protected], and your response may appear in a future Boston.com article.
Student loan collections on defaulted loans have resumed. Are you impacted?
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com