Millions of student-loan borrowers could start losing Social Security benefits and tax refunds in 2 weeks if they don't pay up
Category: News & Politics
Via: robert-in-ohio • 6 days ago • 51 commentsBy: asheffey@businessinsider.com (Ayelet Sheffey)
A drastic and swift change to the way repayment of student loans is handled in the U.S.
I have long held the position that people who sin their name promising to pay back a loan (of any type) should be held accountable to repay that loan.
Exceptions should be made in cases where schools or the loan process itself were fraudulent.
The fact that having a loan payment is hard on people entering the work force is not an exceuse for not meeting one's obligations.
S E E D E D C O N T E N T
- President Donald Trump is resuming collections on defaulted student loans for the first time in five years.
- On May 5, defaulted student-loan borrowers will start to face the consequences of falling behind.
- Those include the seizure of federal benefits such as Social Security and wage garnishment.
President Donald Trump 's administration is resuming collections on defaulted student-loan borrowers for the first time in five years.
On Monday, the Department of Education announced that it would put defaulted borrowers back into repayment on May 5.
"Borrowers who don't make payments on time will see their credit scores go down, and in some cases their wages automatically garnished," Education Secretary Linda McMahon wrote in an opinion piece alongside the announcement.
The department hasn't collected on defaulted student loans since March 2020, as one of the relief measures put in place at the onset of the pandemic. Starting in May, the Federal Student Aid office is set to restart the Treasury Offset Program, which withholds government benefits, including Social Security and tax refunds, from people with past-due payments. After 30 days, the Treasury Department would start garnishing wages for defaulted borrowers.
The department's press release said FSA would contact defaulted borrowers over the next two weeks to urge them to make plans to restart payments.
"If you are a student borrower with a federal loan balance and haven't been making payments, you must restart payments now," McMahon said. "Our Federal Student Aid office is providing every form of assistance we legally can to ensure that a monthly payment can fit into your budget."
More than 5 million student-loan borrowers are in default, or over 270 days past due. The New York Federal Reserve recently estimated that more than 9 million borrowers were behind on their bills but not yet in default after pandemic-era protections expired.
Some Democratic lawmakers have previously raised the alarm on the consequences of defaulting for student-loan borrowers. Last year, Sen. Elizabeth Warren led a group of her colleagues in urging the Biden administration to end the practice of withholding Social Security benefits for defaulted borrowers.
It's a "particularly devastating practice for seniors and people with disabilities who rely on Social Security as their sole source of income," the lawmakers said.
Trump's Education Department recommended that borrowers in default contact the Default Resolution Group to make a monthly payment or enroll in an income-driven repayment plan.
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"If you are a student borrower with a federal loan balance and haven't been making payments, you must restart payments now," McMahon said. "Our Federal Student Aid office is providing every form of assistance we legally can to ensure that a monthly payment can fit into your budget."
Sounds like folks need to have a plan and they need it now
They signed the contract for the loan. They need to uphold their side of that agreement.
I agree - the student loan should not be treated any different than a mortgage or other personal loan that a person si responsible to pay back once they sign on the dotted line of the contract.
I would agree as well, except for the fact those business people (many of which were/are in Congress are) were forgiven their covid loans. How come they get a pass, but no one else does? Who really are the 'takers' in our society?
We all know that the "forgiveness" was merely pandering by the geriatric fool.
evilone
I agree that "loans" made during the pandemic should be repaid as well, but as I was taught when a child - two "wrongs" do not make a "right"
Based on your argument, one could that they should not have to pay of their mortgage or car loan or home improvement loan
Hmm.
One group signed up for "loans" with the understanding they would be forgiven if they used a certain percentage to pay employee wages during an economic crisis caused by a government shutdown of the economy.
One group signed up for loans and promised to pay them back.
do you think they are the same thing?
"We all know"
Jeremy - I am not sure you actually speak for "we all" you certainly do not speak for me in this case.
"we all" could just as logically make the argument that the current plan is proffered by the geriatric fool currently in the white house
Do you think the employees who received wages during the pandemic thanks to these loans should pay them back as well? Or just the businesses who were used as pass through vehicles?
Yeah...I'm sure Ford Motor won't have any problems with that
No
But if the money was not totally and completely and only used for that purpose, the balance should be returned to the government
The government (i.e. the taxpayer) can repay Ford etc that is what is happening when these loans are forgiven - the taxpayers (who don't have delinquent loans) are actually paying off the loans
If a business didn't use the money for the purposes dictated by the government, they had to pay it back. That was what they signed up for and that remains the case today. The terms were not changed after the loan, like the "forgiveness" crowd is trying to do.
Let me be more concise. We (those of us whose use critical thinking skills) all know...
Then shouldn't we talking about holding our lawmakers more accountable than we are asking our children to be?
I didn't make an argument, I made a comparison.
Sure, it's great that congress can give themselves favorable loan terms and them wave the terms in the end anyway.
None of them signed up to have their loans be subject to the whims of a tyrannical government that see them as enemies.
You do realize that many of the business owners were the only employees that got paid, right?
I was taught to pay my debts. So I do. And I have a great credit score because I pay my bills
Let me be more concise. We (those of us whose use critical thinking skills) all know...
Thos that think that critical thinking skills reside only with certain politically inclined invidiuals actually lack those critical thinking skills they crow about
Just sayin
Let me be more concise. We (those of us whose use critical thinking skills) all know...
Good point
I totally separate and unrelated discussion, but YES
All they need do is pay back the loan, whcih they gave their word they would do when they signed the contract and their responsibility will be at the whims of no one ut themselves
I also and also I was t aught that when I gave my word about a loan or anything else - keeping that promise was the most important thing in my life
One we never seem to have.
Look... I'm not arguing they should (or shouldn't) pay it back. I'm arguing the Trump Admin are being dicks punishing those with student loans (who are having problems paying) instead of finding ways to help them pay them back.
FFS, there have been dozens of programs in place to help them out, if they are too stupid or lazy to take advantage of them fuck the little bastards, it is time to stop coddling the worthless takers.
7 Federal Programs That Help Borrowers Pay Off Student Loans | SoFi
Student Loan Forgiveness (and Other Ways the Government Can Help You Repay Your Loans) – Federal Student Aid
Personal responsibility is so Boomer.
Personal integrity is not a generational value or it shouldn't be, if a man's (or woman's) word cannot be trusted that person has no value to society
More than 5 million student-loan borrowers are in default, or over 270 days past due. The New York Federal Reserve recently estimated that more than 9 million borrowers were behind on their bills but not yet in default after pandemic-era protections expired.
Does anyone think this will be a smooth process? ...that people will simply set up payment plans and start paying off their loans?
No and all this does is energize the democrats for the next election.
And millions of people will see that as the lone positive from this program
Bribing voters is an effective strategy and democrats still couldn't win in 2020.
Sean
"Bribing"
You mean like Musk's shenanigans in Wisconsin
I mean like promsing to forgive student loans if you vote for a party.
Musk raffled off money for people who voted. See the difference?
Nope
I mean like promsing to forgive student loans if you vote for a party.
Musk raffled off money for people who voted. See the difference?
The former was a campaign ploy, based on policy and proposed policy.
The latter was an attempt to illegally influence an election
See the difference?
It was? What Court found that to be the case? Who was arrested for it?
How does raffling money to voters, regardless of who they voted for, "illegally influence" elections? It rewards voting.
So promising voters to keep their tax break isn't the same thing? Weird....
You mean the thing that was thrown out by the courts?
Not weird at all - simply the fact of the matter
Did voters sign a personal contract to pay pay taxes at a certain level and is a party offering to help them break that contract to pay a specific amount of taxes? I know I never a signed a contract promising to pay taxes at X rate for the next 30 years. Did you?
Sean
You know I need to concede this point to you - it was not "illegal" because a court has not declared it illegal, but it surely stretched what is ethical to the very limit in my view.
Of course, ethics in government seem less important these days
Ethical or not, it was incredibly stupid if there was a partisan goal behind it. But some people think simply getting people to vote is a worthy cause I guess. Since any voter could claim the prize regardless of who they voted for (they could have even left the Supreme Court line blank) it provided no incentive to vote for any candidate. Which is also why its legal.
Does it matter? It's still a bribe to voters in your context of campaign promises.
I think there's a fundamental difference between promising to help some citizens break a private contract they've already received the benefit of, and promising to change generally applicable laws.
But if those that needed help were rich right wing populists you'd probably move the goal posts again.
Lol. What goalpost did I move? Explain that. My position couldn't be more consistent.
Contracts are contracts. Taxes are taxes. You are pretending they are the same, not me.
right wing populists
Like you are advocating the government intervene and break the contracts for the benefit of rich predominately left wingers at the cost of a trillion dollars of taxpayer dollars?
You have now capitulated.
Student loans were not free money.
Letting then get out of paying them back cheats those who paid their way or those who paid off the loans
I agree.
I got a very small student loan when I went to college and paid it back while also paying child support and making minimum wage cleaning a bar after closing. Even though I worked my ass off to do so, I don't agree that someone else getting loan relief cheats me out of anything. There are many areas of life where people get breaks and I don't. Is a student who has rich parents pay their schooling cheating poor kids who have to work and take out loans? No. It's life. And life's not fair.
Absolutely correct
a student loaned me money once, and they soon learned a valuable lesson that all students should learn, before they wind up loaning predatory institutions monies for failing, say like in the 2008-2009 housing crisis. Cause De Jesus Crisis, where was it taught, that when corporations have so much influence, our kid's Country can be sold and bought, and even caught, yet, "if it weren't for those meddling kids" ( Those former students who's greed did influence and create loop holes to reward failure)they "would have got away with it too" cause they did! But that's a different bedtime story. My point is, with our politician's being able to be bought with anonymous unlimited donations and "corporation's are (being called) people too", whats a greedy ole lobbyist bought and paid for corrupt party (both) to do, but buy off voters with schemes and scams, via promises to LiE (the only one most keep) as we watch a nation slowly bankrupt and DiE.
My bottom line is the terms for these loans should be made with a compatibility to our corporate bailouts, for unless we better educate this countries students, sorta the opposite of what Trump is currently doing, and US have obviously done, there will not be one, as in a Country. Students in other nations often get much better primary educations and many pay for, or help more, than say US, with secondary schooling thus why our standing is so diminished in the world.
So don't forgive debts completely, make them competitive and then see, who choose to carry their promised load, and those who wish to free load, cause the dumbing down of America is costing US All, and that cost is anything but SMALL!