Are the feds about to start hounding you over your student loans?

The Department of Education (ED) has resumed collections on defaulted federal student loans after a five-year pause. Around 5 million borrowers are currently in default, with another 5 million delinquent, potentially leading to a massive increase in defaults. The ED is using the Treasury Offset Program (TOP) to garnish wages and Treasury payments. However, borrowers receive a 65-day notice before garnishment begins. Interest continues to accrue on defaulted loans, adding to the debt burden. Many borrowers face challenges like loan servicer changes and confusion about repayment terms. Federal student loans have no statute of limitations, meaning the government can pursue collection indefinitely. To avoid garnishment, borrowers should identify their loan servicer, understand their loan terms, and explore options like income-driven repayment, loan rehabilitation, or consolidation. Repaying the loan in full is ideal but challenging for many. Acting promptly allows borrowers to address their defaulted loans before facing wage garnishment.