Washington (AP) – The Department of Education will start collection next month student loans Who are in default, including the gaining wages for millions of borrowers, officials announced on Monday.
Currently, around 5.3 million borrowers are defaulting on their federal student loans.
THE Trump administration The announcement of the end of a leniency period that started during the Pandemic COVID-19. No loan to federal students has been returned for collection since March 2020, including those in default. Under President Joe Biden, the Department of Education has tried several times to forgive millions of student loans, to be arrested by the courts.
“American taxpayers will no longer be forced to serve as a guarantee for irresponsible student loan policies,” said the Secretary of Education Linda McMahon.
From May 5, the ministry will begin involuntary collection through the compensation program of the Treasury Department, which retains government payments – including tax reimbursements, federal wages and other advantages – people with debts spent in government. After a notice of 30 days, the ministry will also begin to guarantee wages for default borrowers.
The decision to send debts to the collections aroused criticism from the defenders.
“This is cruel, useless and will still stir up the flames of economic chaos for the families of workers across this country,” said Mike Pierce, executive director of the Borrower Protection Center Student.
Already, many borrowers have been preparing since future bonds.
In 2020, President Donald Trump The federal payments of student loans and the interests have paused as a temporary relief measure for borrowing students. The payment break has been extended several times by the Biden administration until 2023, and a period of final grace for loan reimbursements ended in October 2024. This meant that tens of millions of Americans had to start making payments again.
Borrowers who do not pay for nine months in default, which is reported on their credit ratings and can go to collections.
In addition to the borrowers already in default, around $ 4 million are between 91 and 180 days behind their loan payments. Less than 40% of all borrowers are up to date on their student loans, said department officials.
For default borrowers, a step to avoid wage and wage entry consists in accessing the rehabilitation of loans, said Betsy Mayotte, president of the Institut for Student Loan Advisors.
Borrowers must ask their loan service to be placed in a loan rehabilitation program. As a rule, the agents request proof of income and expenses to calculate a payment amount. Once a borrower has paid in time for nine consecutive months, it is withdrawn from defect, said Mayotte. A loan rehabilitation can only be carried out once.
Biden supervised the cancellation of student loans for more than 5 million borrowers. Despite the Rejection of the Supreme Court Among his signature proposal for a large relief, he gave up more than $ 183.6 billion in student loans thanks to programs extended to forgiveness.
In his statement on Misd McMahon on Monday said that Biden had gone too far.
“In the future, the Ministry of Education, in collaboration with the Ministry of the Treasury, will direct the student loan program in a responsible manner and according to the law, which means helping borrowers to return to reimbursement-both for their own financial health and the economic prospects of our country,” she said.
___
The writer Associated Press Adriana Morga in New York contributed to this report.
___
The educational coverage of the Associated Press receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP norms To work with philanthropies, a list Supporters and financed coverage areas of AP.ORG.
