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Washington — The Education Department volition soon statesman collecting payments for pupil loans that are successful default, including done wage garnishment for perchance millions of borrowers, the section announced Monday.
Beginning May 5, the Education Department volition statesman involuntary collections done the Treasury Department's offset program, which claws backmost delinquent debts by withholding payments specified arsenic taxation refunds, national salaries and Social Security benefits.
More than 5 cardinal borrowers are successful default and 4 cardinal much could beryllium successful the aforesaid presumption successful a fewer months, which would enactment astir a 4th of the national pupil indebtedness portfolio successful default, according to the Education Department. Less than 40% of borrowers are existent connected their pupil indebtedness payments.
In the adjacent 2 weeks, those successful default volition person emails informing them of the adjacent steps and urging them to look into repayment options. Wage garnishment notices volition beryllium sent retired aboriginal this summer.
No national pupil indebtedness has been referred to collections since March 2020 erstwhile President Trump paused payments and involvement accrual during the COVID-19 pandemic. The Biden medication extended that pause, which ended successful October 2024.
Former President Joe Biden sought to hitch retired pupil indebtedness indebtedness for tens of millions of radical during his 4 years successful the White House, but the effort was repeatedly rejected by courts, including a 2023 ruling by the Supreme Court. Still, the Biden medication erased pupil indebtedness indebtedness for much than 5 cardinal borrowers done other forgiveness programs.
Education Secretary Linda McMahon said the Biden medication "misled" borrowers astir its authorization to waive debt.
"Going forward, the Department of Education, successful conjunction with the Department of Treasury, volition shepherd the pupil indebtedness programme responsibly and according to the law, which means helping borrowers instrumentality to repayment — some for the involvement of their ain fiscal wellness and our nation's economical outlook," she said successful a connection Monday.
The announcement from the section added, "There volition not beryllium immoderate wide indebtedness forgiveness."
Caitlin Yilek is simply a authorities newsman astatine CBSNews.com, based successful Washington, D.C. She antecedently worked for the Washington Examiner and The Hill, and was a subordinate of the 2022 Paul Miller Washington Reporting Fellowship with the National Press Foundation.
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