Story perspectives

Student Loan Collections Resume: 5 Million Face Default Risks

9/5/2025

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Summary

Story summary

The U.S. government paused student loan collections in 2020 due to the pandemic, resuming on May 5, 2025.
Over 5 million borrowers are in default, facing potential wage garnishment of up to 15% of disposable income.
Borrowers can prevent garnishment by negotiating payment plans, consolidating loans, or seeking deferment.
Payment reversals frequently occur, complicating situations for borrowers like Gabrielle Perry with MOHELA.
Experts advise borrowers to consult financial advisers and reach out to Congress for support.

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Story summary

The U.S. government paused student loan collections in 2020 due to the pandemic, resuming on May 5, 2025.
Over 5 million borrowers are in default, facing potential wage garnishment of up to 15% of disposable income.
Borrowers can prevent garnishment by negotiating payment plans, consolidating loans, or seeking deferment.
Payment reversals frequently occur, complicating situations for borrowers like Gabrielle Perry with MOHELA.
Experts advise borrowers to consult financial advisers and reach out to Congress for support.