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. This pause means that actions like wage garnishment and tax refund seizures will not happen right now. These actions are part of the government's power to collect on defaulted loans without going to court. The department had started sending out notices for wage garnishment and referring borrowers to the Treasury Offset program, but now those efforts are on hold.Not all loans are covered by this pause. Only defaulted federal student loans held by the Education Department are included. Other types of loans, like those not in default or private student loans, are not affected. It's also unclear if defaulted FFEL-program loans held by guaranty agencies are covered. 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 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.