Trump Administration to resume collections on student loan borrowers in default
After a five-year hiatus, the U.S. Department of Education says it will begin resuming collections of defaulted student loans on May 5.
Of the more than 42.7 million student loan borrowers in the U.S., who owe a collective $1.6 trillion, the department says that more than 5 million have not made a payment in the past year. That number is expected to grow as an additional 4 million borrowers are approaching default status.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” U.S. Secretary of Education Linda McMahon said in a statement.
The department said it will begin notifying borrowers who are in default via email over the next two weeks, urging them to make a payment or to enroll in a repayment plan, and referring them to a government website providing information on how to do so.
Then, on May 5, the department will begin referring borrowers who remain in default to a collections program run by the Treasury Department.
“This could not have come at a worst time for millions of Americans,” said Aissa Canchola Bañez, Policy Director for the Student Borrower Protection Center, a nonprofit group that aims to reduce student debt. Those borrowers, she added, “are already finding themselves having to navigate such incredible economic uncertainty over the last few months.”
She also points to the fact that older borrowers tend to face the greatest struggles in repaying their loans: nearly 40 percent of federal borrowers over the age of 65 were in default on their student loans, according to a 2017 report from the Consumer Financial Protection Bureau. “These are older folks who are on fixed incomes,” she says.
When borrowers fall behind, Bañez added, their credit scores can take a hit, making it harder to qualify for more credit and other loans for things like housing and other basic needs.
The Education Department said in its notice that, later this summer, it will begin the process of garnishing wages—meaning payments would be automatically deducted from borrowers’ paychecks.
As the shutdown drags on, the threat of permanent cuts is mired in politics
President Trump is meeting with his budget director, Russ Vought, about what additional cuts to make during the shutdown, and the president says his targets are partisan.
Pope Leo’s religious community is drawing renewed interest. Here’s what makes it unique
"Before, we might get two or three discerners. But after Pope Leo, I now have 15. It's unbelievable."
The CDC still hasn’t issued COVID vaccine guidelines, leaving access in limbo
Access to the COVID-19 vaccines remains difficult because of an unusual and unexplained delay by the Centers for Disease Control and Prevention in accepting recommendations from its advisers.
National Guard presence may deter crime, but experts warn of the long-term costs
As President Trump ramps up efforts to send federal officers and troops into cities, criminologists are watching closely. Are the feds doing this in a smart way?
Coalition raises concerns surrounding manufacturer’s environmental, labor practices in small Alabama town
The report from the Good Neighbors Alabama coalition concerns the Neptune Technology Group plant in Tallassee.
AI designs for dangerous DNA can slip past biosecurity measures, study shows
Companies that make DNA for science labs screen out any requests for dangerous bits of genetic material. But a new study shows how AI could help malevolent actors get the stuff anyway.
