U.S. Student Loan Repayments to Resume Amid Economic Uncertainty

The U.S. Department of Education will restart collecting federal student loans from defaulters on May 5, affecting over 5 million borrowers. The collection pause began in 2020 amid COVID-19. As communications roll out, wage garnishments will start this summer. Student debt relief remains a contentious topic in U.S. politics.

The U.S. Department of Education announced on Monday it will recommence the collection of federal student loan repayments from borrowers in default starting May 5, concluding a halt of over five years.

This decision impacts more than 5 million borrowers currently in default and an additional 4 million who are behind on payments. Loan repayments were initially paused in 2020 to offer financial relief amid the pandemic's economic challenges. Defaulted borrowers will begin receiving emails from the Office of Federal Student Aid, with wage garnishments set to initiate this summer.

Education Secretary Linda McMahon declared, "American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies." Attempts at providing student debt relief by former President Joe Biden faced setbacks, meeting criticism, notably from Republicans and former President Donald Trump. The Student Borrower Protection Center criticized the reinstated collections amid rising costs and economic strains.

(With inputs from agencies.)