The U.S. Department of Education revealed this week that 5.3 million student loan borrowers who are currently in default could begin to lose access to federal wages and benefits by the end of the summer. The announcement underscores a looming shift in the federal government’s approach to collecting on long-delinquent education debt following the end of pandemic-era protections.
During the COVID-19 pandemic, federal student loan payments were paused and collections efforts were suspended as part of emergency relief measures. However, with the winding down of those measures, the government is now preparing to resume enforcement actions, which may include wage garnishments and offsets to federal benefits such as Social Security.
The Department of Education has urged borrowers at risk of enforcement to seek out available repayment and rehabilitation programs that could help them avoid punitive actions. Programs such as the Fresh Start initiative offer a pathway for borrowers to return their loans to good standing by enrolling in income-driven repayment plans or other available options.
Advocates for borrowers have raised concerns that many may not be aware of their options or the potential consequences they face. Calls for extended relief and more widespread debt forgiveness continue to emerge from debt relief groups and some members of Congress.
The Department is expected to provide official notices and outreach to affected borrowers in the coming months, offering guidance on how to avoid enforcement and regain access to essential federal services.
As the summer deadline approaches, millions of Americans are encouraged to review their loan status and explore federal resources to mitigate the impact of default-related consequences.
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