Cnn
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The Ministry of Education announced on Monday that it will restart the collection of federal student loans on May 5, ending a break from the pandemic era which started about five years ago.
More than 5 million borrowers are in default, the ministry said in a press release. Federal student loans are defaulting after 270 days without payment.
“American taxpayers will no longer be forced to serve as a guarantee for irresponsible student loan policies,” said education secretary Linda McMahon in a statement. “Administration Biden has misleaded borrowers: the executive power does not have the constitutional authority to erase debts, and loan sales do not disappear either.”
Within the framework of this decision, the assistance office of students from the Department of Education will restart the compensation program of the Treasury, which collects debts by garnishing federal and state payments, such as income declarations or social security services.
The Ministry’s announcement on Monday announced the default borrowers to contact the default resolution group of the student assistance office and to “make a monthly payment, register for an income -based reimbursement plan or register for loan rehabilitation”.
The office will move to the start of the administrative wage-ending process this summer. This process allows a federal agency to order a non -federal employer to retain a percentage of an employee’s income to pay a delinquent debt, according to the Bureau of the Tax Service.
This decision comes as the Trump administration works to dismantle the education department. President Donald Trump signed an executive decree last month, ordering McMahon to start the department of closing the department. Trump later said that the Small Business Administration would absorb the massive student loan portfolio from the Department of Education. The loan portfolio totals an amazing debt of $ 1.8 billion, previously reported CNN.
The end of the multi -year break also arrives while borrowers are faced with limited access to affordable payment programs. In an effort to comply with a recent court order to end the safeguard of the Biden administration (savings on a precious education plan), the Ministry of Education has deleted requests from all reimbursement plans focused on the website, effectively preventing borrowers from adjusting their plans if they are unable to pay the standard tariff.
The Department of Education also declared on Monday that it will share information next week on a new reimbursement process focused on “improved” income which, according to him, will delete “the need for borrowers to rectify their income each year”.
The safeguard plan, introduced in 2023 and mired in legal challenges, allowed borrowers to cap their monthly student loan bills at 5% of their income instead of 10%. The borrowers were also promised forgiveness for student loans after having done as little as 10 years of payments.
The Student Borrower Protection Center, a defender’s defense organization, called the Trump administration raising the break on the involuntary collections for the failing in the absence of income -focused reimbursement plans.
“For five million people in default, the federal law gives borrowers a means to go out by default and the right to make loan payments they can afford,” said executive director Mike Pierce in a press release on Monday. “Since February, Donald Trump and Linda McMahon have blocked the path of these out of defect borrowers and now feed them in the mouth of the government’s debt collection machine.”
This report has been updated with additional information.
Kayla Tausche of CNN contributed to this report.
