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WASHINGTON (AP) — The Education Department will begin collection next month on student loans that are in default, including the garnishing of wages for potentially millions of borrowers,officials said Monday.
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Currently, roughly 5.3 million borrowers are in default on their federal student loans.
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The Trump administration ‘s announcement marks an end to a period of leniency that began during the COVID-19 pandemic. No federal student loans have been referred for collection since March 2020, including those in default.
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Beginning May 5, the department will begin involuntary collection through the Treasury Department’s offset program, which withholds payments from the government — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government. After a 30-day notice, the department will also begin garnishing wages for borrowers in default.
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Already, many borrowers have been bracing for obligations coming due.
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In 2020, the Biden administration paused federal student loan payments and interest accrual as a temporary relief measure for student borrowers. The pause in payments was extended multiple times through 2023, and a final grace period for loan repayments ended in October 2024. That meant tens of millions of Americans had to start making payments again.
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Borrowers who don’t make payments for nine months go into default, which is reported on their credit scores and can go to collections.
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In addition to the borrowers already in default, around another 4 million are between 91 to 180 days late on their loan payments. Less than 40% of all borrowers are current on their student loans, department officials said.
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The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
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