The Department of Education will resume collections on May 5 for federal student loans in default for the first time in five years, impacting some 5 million borrowers.
Since March 2020, the department has not collected on default loans. When Congress mandated student and parent borrowers to resume student loan payments in October 2023, the previous administration granted borrowers another year to be protected from the negative effects of missed payments. Former President Joe Biden also did not lift the collections freeze.
This will now change beginning next month,Secretary of Education Linda McMahon said on April 21.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” McMahon said in a statement. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear.”…