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The Trump administration announced it will restart collections on federal student loans that are in default beginning May 5, warning borrowers could be referred to debt collectors or enrolled in repayment plans. “Debt cannot be wiped away. It just ends up getting transferred to others,” White House Press Secretary Karoline Leavitt said Tuesday. “So why should Americans who didn’t go to college or went to college and responsibly paid back their loans pay for the student loans of other Americans?” The federal government paused repayment requirements on student loans in March 2020 at the onset of the COVID pandemic and the Biden administration repeatedly sought to bring borrowers who defaulted back into good standing or to erase debt entirely. However, Biden-era plans to forgive up to $20,000 in loans for millions of borrowers were struck down by the Supreme Court, and another plan to adjust borrowers’ payment plans based on household size and income have been frozen by the court since August. The Trump administration has made it clear that no such forgiveness plans will be offered under its watch. “If you take out a loan, you have to pay it back. It’s very simple,” Ms. Leavitt said. Almost 43 million people hold student loans from the federal government, totaling more than $1.6 trillion in debt, according to the Education Department. Only 38% of borrowers are in repayment and current on their student loans, while more than 5 million holders of student debt have not made a repayment in the last year. Borrowers who are in default will receive notice within the next two weeks informing them of their status and potentially referring them to federal debt collectors or directing them to enroll in an income-driven repayment plan or to sign up for loan rehabilitation. The administration said later this summer it could start garnishment of wages, social security or tax refunds. #studentloans #studentdebt #karolineleavitt #cspan
#studentloandebt #collections #presidenttrump The White House is drawing a line in the sand when it comes to federal student loans in default. They will send you to the federal government’s collections program. This is much more serious than a regular collections agency. This video explains how you can get your loan out of default.