The Trump administration is set to restart collections on defaulted student loans after a five-year hiatus, beginning May 5. The Department of Education announced that borrowers who have not made payments will face consequences, including a decline in credit scores and potential wage garnishment. This decision comes after a pause on collections since March 2020, which was part of the pandemic relief measures. Over 5 million borrowers are currently in default, while more than 9 million are behind on payments but not yet in default. The Federal Student Aid office will reach out to these borrowers to encourage them to resume payments, emphasizing the importance of budgeting for monthly payments. Education Secretary Linda McMahon highlighted the need for borrowers to take immediate action, while some lawmakers, including Sen. Elizabeth Warren, have raised concerns about the impact of withholding Social Security benefits from defaulted borrowers, particularly affecting vulnerable populations such as seniors and individuals with disabilities.
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