A Break for Some Student Loan Borrowers: What You Need to Know

The Education Department has decided to pause certain collection actions for some federal student loan borrowers. This move gives those in default a bit of a break while the government works on updating loan repayment and forgiveness programs.

Key Points

• Pause on Collection Actions: Actions like wage garnishment and tax refund seizures will not happen right now.
• Affected Loans: Only defaulted federal student loans held by the Education Department are included.
• Exclusions: Other types of loans, like those not in default or private student loans, are not affected.
• Uncertainty: It's unclear if defaulted FFEL-program loans held by guaranty agencies are covered.

Advocacy Groups' Perspective

Advocacy groups see this as a temporary relief. They hope the government will use this time to offer more comprehensive debt relief and stop collections for good. The pause is meant to help implement new changes to loan forgiveness and repayment programs, but some groups think the department is struggling with backlogs and delays.

Borrowers' Opportunity

Borrowers in default now have more time to figure out their situation. They can take steps to get out of default or prevent it from happening. This pause is a chance to catch up and avoid harsh collection actions.