The Department of Education will restart “involuntary” repayments of defaulted student loans after a nearly five-year pause, cautioning that as soon as next month borrowers could be referred to debt collectors or even have their wages and benefits withheld.
“Debt cannot be wiped away. It just ends up getting transferred to others,” press secretary Karoline Leavitt told reporters on Tuesday, a day after the announcement was made. “The government can and will collect defaulted federal student loan debt by withholding money from borrowers, tax refunds, federal pensions and even their wages. … If you take out a loan, you have to pay it back.”
Payments were initially paused by the first Trump administration in March 2020 due to the COVID-19 pandemic. The Biden administration then extended the pause.
Here’s what to know about the situation and what the options are.
This post originally appeared at U.S. News & World Report.