Minnesota, United States — On May 5, the White House and the United States Education Department will officially implement a new student loan policy.
According to the Education Department, the policies will affect more than 5 million Americans who are currently in default on federal student loans. According to the Education Department, another 10 million Americans may soon be in default on their loans if they do not act within the next few months.
White House Press Secretary Karoline Leavitt reaffirmed the Education Department’s statement that student loan borrowers who do not repay the money may face “involuntary” collections.
“The government can and will collect federal defaulted student loan debt by withholding money from borrowers’ tax refunds, federal pensions and even their wages,” according to Leavitt.
According to the Education Department, student loan borrowers in default will receive email messages within the next two weeks explaining their options for avoiding garnishments.
According to Chris Wills of College Inside Track, a college enrolment and financial aid consulting service, student loan borrowers have several options for avoiding garnishment.
“They could enrol in income-based repayment plans. There is also something called loan rehabilitation, which allows people to make consecutive payments to get out of default,” Wills explained. “My biggest bit of advice would be to ask a lot of questions and to try and find a solution that works best for them and their situation.”
Wills hopes that the administration will send out additional information in the coming weeks to help student loan borrowers navigate these new policies.
According to the Education Department, only 38% of borrowers make their student loan payments on time.