The U.S. Department of Education announced its Office of Federal Student Aid (FSA) will resume collections of its defaulted federal student loan portfolio on Monday, May 5th. The Department temporarily ceased withholdings on these loans in March 2020 and will resume on May 5th, 2025.
The Office of Federal Student Aid loan contributions will restart with the Treasury Offset Program, administered by the U.S. Department of Treasury. All borrowers in default will receive email communications from the Office of Federal Student Aid over the next 2 weeks making them aware of these developments. Communication will include a recommendation for the individual to contact the Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. Later this summer, the Office of Federal Student Aid will send required notices to applicable borrowers informing them of the resurrected administrative wage garnishment.
Additional detailed information on the collections and more to assist borrowers to get out of default is available at StudentAid.gov/end-default. Please follow the below link for the full press release from the US Department of Education.
U.S. Department of Education Press Release
If you have ANY questions, please contact the HCM Service Team at 407-447-3837 or via email: hcmservice@plansource.com
