Federal Student Loan Collections Will Stop for 60 Days

Secretary of Education Betsy DeVos in 2019

Secretary of Education Betsy DeVos in 2019
Photo: Getty Images

The Department of Education has announced that it will stop the collections process for federal student loans in default, including wage garnishment actions, due to the coronavirus pandemic.

According to the department’s press release, it has stopped requests to the U.S. Treasury to withhold money from tax refunds, Social Security payments, and “other federal payments” for borrowers who are in default.

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The change is retroactive to March 13 and will last at least 60 days.

If your wages are being garnished because your student loan is in default, you must contact your employer’s human resources department to have your paychecks adjusted.

If you are in the process of communicating with a private debt collection agency and want to continue that contact (say, to continue a payment arrangement you already set up), you should contact the Department of Education’s Default Resolution Group at 1-800-621-3115.

Otherwise, you don’t have to do anything for the collections process to be paused.

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“These are difficult times for many Americans, and we don’t want to do anything that will make it harder for them to make ends meet or create additional stress,” DeVos said in a statement. “Americans counting on their tax refund or Social Security check to make ends meet during this national emergency should receive those funds, and our actions today will make sure they do.”

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President Trump previously announced that federal student loan borrowers can pause their payments for two months, but only if they request a suspension from their loan servicer. The exception is for delinquent accounts (late for 31 days or more), which have had payments suspended automatically.

That announcement came shortly after Trump lowered the interest rate for federal student loans to zero.

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Darknet  Lifehacker

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