According to the Associated Press, beginning May 5, the Education Department will resume collecting defaulted student loans through the Treasury Department’s offset program, which withholds tax refunds, federal salaries, and benefits.
Borrowers may also face wage garnishment after 30 days’ notice. This move ends a COVID-era pause on collections in place since March 2020.
About 5.3 million borrowers are currently in default, with millions more at risk. Advocates criticize the policy as harsh and confusing, citing frequent policy shifts between administrations.
Some borrowers struggle to understand repayment options, especially after recent court rulings disrupted income-driven repayment plans.
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