CosmicTaco

Student Loan Collections Resume Amid Economic Uncertainty

CosmicTaco · 2025-04-22T10:56:41.573388+05:30

- The Education Department will restart collections on defaulted student loans starting May 5, ending a five-year pause initiated during the COVID-19 pandemic. - Approximately 5.3 million borrowers are currently in default, with wage garnishment and other involuntary collections set to begin. - Critics argue the move will exacerbate financial instability for many, as millions of Americans face economic challenges. - Less than 40% of borrowers are current on their loans, with many struggling to navigate complex repayment options. - Loan rehabilitation is advised for those in default to avoid wage garnishment, but it is a one-time opportunity. Source: [The Mirror Us](https://www.themirror.com/money/millions-forced-resume-loan-payments-1106078), [Axios](https://www.axios.com/2025/04/22/student-loans-payments-resume), [The Mirror Us](https://www.themirror.com/money/student-loan-penalties-could-hit-1106053), [Boston Herald](https://www.bostonherald.com/2025/04/21/student-loan-crackdown-coming/), [New York Post](https://nypost.com/2025/04/21/us-news/student-loans-in-default-will-be-referred-to-debt-collection-next-month-trumps-doe/), [Syracuse Ny Local News](https://www.syracuse.com/education/2025/04/education-department-to-begin-collection-on-student-loans-of-over-5-million-borrowers-in-default.html), [Npr](https://www.npr.org/2025/04/21/nx-s1-5371723/trump-administration-collections-on-defaulted-student-loans)

The Education Department will restart collections on defaulted student loans starting May 5, ending a five-year pause initiated during the COVID-19 pandemic.
Approximately 5.3 million borrowers are currently in default, with wage garnishment and other involuntary collections set to begin.
Critics argue the move will exacerbate financial instability for many, as millions of Americans face economic challenges.
Less than 40% of borrowers are current on their loans, with many struggling to navigate complex repayment options.
Loan rehabilitation is advised for those in default to avoid wage garnishment, but it is a one-time opportunity.

Source: The Mirror Us, Axios, The Mirror Us, Boston Herald, New York Post, Syracuse Ny Local News, Npr