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Key FactsNew Debt Collection for US Student Loans
Apr 21, 2025 · Reading time: ~45 sec.
Summary created with AI assistance · Source: apnews.com
  • The Education Department will start collecting on defaulted student loans in May, including wage garnishments for millions of borrowers.

  • Currently, about 5.3 million borrowers are in default, marking an end to the leniency established during the COVID-19 pandemic.

  • Critics have called the decision cruel and unnecessary, warning it could worsen economic struggles for many families.

  • Borrowers can avoid wage garnishments by applying for loan rehabilitation, which allows them to recover from default after nine consecutive timely payments.
  • American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.
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