Starting May 5th of this year, the Federal Government will resume collection of student loan debt. If an account goes into collection, then the feds will take necessary action to retrieve the funds. This could come in the form of the interception of tax returns, federal pensions, or garnishing wages from paychecks. The current student loan debt bubble is $1.6 trillion dollars, but only 4 out of 10 borrowers are currently paying their debt. There had been a pause on student loan collection since 2020 due to the pandemic, but those days are over and it is now time for borrowers to repay the debt that they signed up for.
SOURCES:
How to prepare for collection of defaulted student loans : NPR
Education Department Will Resume Collections on Student Loan Debt – The New York Times
New York Fed Warns of Credit Score Drops Up to 171 Points as Student Loan Payments Resume – OTE News
Collection on defaulted student loans to restart May 5
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