After a five-year hiatus due to the pandemic, collections for defaulted student loans are set to resume today.
The U.S. government warns that defaulting now could result in garnishment of state or federal benefits, with wage garnishment beginning this summer.
The Department of Education estimates that approximately 5 million borrowers are currently in default on their student loans. Additionally, another 4 million borrowers are more than 90 days late on their payments.
For those concerned about defaulting, experts recommend exploring options such as income-driven repayment plans, payment pauses known as deferment or forbearance, and options for consolidation or refinancing.
The Department of Education advises borrowers with defaulted loans to seek assistance from the Student Aid Office's Default Resolution Group. Through a process called rehabilitation, borrowers may be able to restore their loan status.
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