Education Department Revamps Strategy to Reinitiate Collection of Defaulted Student Loans

The U.S. Department of Education revealed on Monday that it will resume the collection of defaulted federal student loans starting May 5, concluding a five-year moratorium. Over 5 million borrowers are affected. Education Secretary Linda McMahon criticized the Biden administration for misleading borrowers regarding debt forgiveness. As part of this initiative, the Treasury Offset Program will be reinstated, garnishing federal payments for debt settlement. Additionally, the Education Department plans to introduce a new repayment process, which may offer more flexible options for borrowers.