CA, US & World
Federal Student Loan Collections Resume Monday
After a nearly five-year pause, federal student loan collections will restart on Monday.
The Department of Education is officially ending the pandemic-era break on defaulted loan payments.
This decision is expected to impact over five million borrowers nationwide.
Those in default are being encouraged to take immediate action to avoid wage garnishment.
Options include making a monthly payment, enrolling in an income-driven repayment plan, or applying for loan rehabilitation.
Failing to act could have financial consequences for borrowers.
The Department can instruct non-federal employers to withhold a portion of wages to recover the debt.
This process, known as wage garnishment, can take place without a court order.
Loan rehabilitation may offer a way to remove defaults from credit reports.
Borrowers are being urged to contact their loan servicer as soon as possible.
The goal is to help people get back on track while minimizing financial harm.
Support resources and online tools are available through the Federal Student Aid website.
By: NBC Palm Springs
May 4, 2025
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