On April 21, the U.S. Department of Education announced that the Office of Federal Student Aid will restart student debt collections beginning May 5. This reinstatement is pivotal as it introduces involuntary collections, which can include wage garnishments and withholding of tax refunds. Borrowers typically enter this phase after 270 days of unpaid loans. Financial experts highlight the severe emotional and financial ramifications for borrowers, including unexpected wage garnishment notifications from employers. The measures adhere to the Higher Education Act, ensuring borrowers receive adequate notice before collections take place.
The return of student debt collections signifies a renewed enforcement of payment obligations, potentially affecting many borrowers who have not settled their debts.
The U.S. Department of Education's collection announcement signals the resumption of aggressive measures against delinquent borrowers after a five-year hiatus.
#student-loans #debt-collection #financial-hardship #us-department-of-education #federal-student-aid
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