Major alert for defaulted student loans: A new policy shift impacts more than 5 million p

Payments on student loans were paused during Donald Trump’s first presidency in response to the COVID-19 pandemic when a huge number of businesses closed and triggered massive job losses.

However, the Education Department announced Monday it will resume involuntary repayment of federal student loans that are in default.

During Biden’s presidency, he sought to offer forgiveness of the loans but faced opposition from the courts. In 2023, the U.S. Supreme Court ruled his plan to forgive the loans as unconstitutional due to lack of congressional approval.

“Beginning May 5, the department will begin involuntary collection through the Treasury Department’s offset program, which withholds payments from the government — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government,” the Education Department announced. Read more below

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