The U.S. Department of Education said it will restart collecting on defaulted federal student loans starting May 5, after a pause that began in March 2020. The goal is to relieve taxpayers from carrying the weight of unpaid loans taken out for college education.
An outreach campaign will run alongside the move, to make sure borrowers understand their options to return to repayment or exit default.
Although Congress had already set October 2023 as the restart date, the Biden-Harris administration chose not to resume collections until now. In the meantime, many borrowers were left in confusion, and issues with income-based repayment plans remained unsolved.
Right now, over 5 million borrowers haven’t paid in more than 360 days, and another 4 million are at risk. The FSA will activate the Treasury Offset Program, and wage garnishments will begin later this summer. Emails will be sent to borrowers soon, with info on how to restart payments or apply for rehabilitation.
