US Education Department to resume collecting student loans in default

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By Kanishka Singh and Ismail Shakil

WASHINGTON (Reuters) -The U.S. Department of Education said on Monday it will resume collecting federal student repayments from borrowers in default from May 5 after a pause of more than five years.

The resumption will impact more than 5 million borrowers who are in default, the Education Department said in a statement, adding that another 4 million borrowers were late in making payments.

Student loan collections were paused in 2020 as a way to provide relief during economic uncertainty stemming from the COVID-19 pandemic.

All borrowers in default will receive email communications from the Education Department’s Office of Federal Student Aid over the next two weeks, the department said. It will begin sending notices later this summer to start wage garnishment for those in default.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said in a statement.

The administration of Democratic former President Joe Biden often made attempts at providing student debt relief, which met with criticism by Republicans, including President Donald Trump.

Biden’s student loan forgiveness policies also faced setbacks from the courts during his term.

Student Borrower Protection Center, which litigates on behalf of student borrowers and advocates for policy in Washington, condemned the Trump administration’s new announcement.

“The announcement also comes as Americans are navigating unprecedented economic uncertainty,” the advocacy group said, citing rising costs and the economic fallout of recent government firings.

(Reporting by Kanishka Singh and Ismail Shakil; Editing by Bill Berkrot and Leslie Adler)