After a prolonged pandemic-era pause, federal student loan collections are set to resume on May 5, prompting Iowa Senator Chuck Grassley to issue a warning and provide resources for borrowers.
The resumption follows a three-year hiatus that began in March 2020, leaving many borrowers unprepared for the return of monthly payments.
According to the U.S. Department of Education, approximately nine million borrowers are either in default or late-stage delinquency on their loans. These borrowers face the possibility of wage garnishment, tax refund offsets, and deductions from federal benefits if they fail to address their outstanding debts.
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“The pandemic-related pause is over,” Senator Grassley stated. “Student borrowers need to get in touch with their loan service providers and start making good-faith payments on their loans.”
Grassley highlighted the confusion surrounding the Biden administration’s efforts to cancel student debt and implement income-driven repayment plans, which he believes contributed to the current situation. He noted that government data indicates only one-third of the 38 million borrowers who should be making payments are currently doing so.
To help borrowers navigate the resumption of payments, Senator Grassley provided several key resources:
- StudentAid.gov: Borrowers can access their individual loan details and update contact information on this website.
- Loan Service Provider Websites: Borrowers should also check their loan service provider’s website for specific information.
- Income-Driven Repayment (IDR) Plans: The online tool at https://studentaid.gov/loan-simulator/ allows borrowers to explore IDR plans, which offer monthly payments based on income and family size.
- Standard Repayment Plan: Borrowers who do not choose an alternative plan will be placed on the Standard Repayment Plan, a 10-year fixed repayment plan.
- Federal Student Aid Information Center: Borrowers can contact this center via Live Chat, email, or phone at (800) 433-3243.
- Defaulted Loans/Garnishment Assistance: For help with defaulted loans or wage/tax refund garnishment, borrowers can call (800) 621-3115.
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Grassley also cautioned to be wary of scams, particularly as the May 5 deadline approaches. He warned against solicitations that pressure borrowers to “act now” for loan forgiveness and requests for upfront fees.
He emphasized that borrowers do not need to pay for assistance with setting up payment plans.
“Protect your sensitive information,” Grassley urged. “The U.S. Department of Education and its partner lenders and loan service providers will never ask for your StudentAid.gov username and password.” He also advised borrowers to double-check the authenticity of URLs and email addresses, noting that official communications from the Department of Education will come from specific email addresses, including noreply@studentaid.gov, noreply@debtrelief.studentaid.gov, and ed.gov@public.govdelivery.com.
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Grassley announced his intention to reintroduce legislation in May aimed at empowering student borrowers to make informed financial decisions and increasing transparency in college costs. The goal is to prevent borrowers from becoming overwhelmed by debt in the first place.
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