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Why delinquent student loan borrowers may struggle to get a mortgage
- The Department of Education will resume involuntary debt collection on defaulted federal student loans starting May 5, 2025.
- This action follows a five-year leniency period for borrowers in default during the pandemic.
- More than five million borrowers are in default, having not made payments in over 270 days.
- Administrative wage garnishment can take fifteen percent of after-tax income, says Lisa Espada.
- This collection could lead to wage garnishment, tax refund offset, and negative credit report marks.
27 Articles
27 Articles
Three Ways People With Student Loan Debt Can Protect Their Credit Scores
The resumption of student loan payments is going to complicate the already overextended financial situation for millions of Americans. Especially after the five-year pause on payments that began during the COVID-19 pandemic, many borrowers are having to significantly readjust and re-evaluate their budgets. Here's how borrowers suffering through collections can navigate their financial future, especially when it comes to protecting and rebuilding
LA Daily News
Why delinquent student loan borrowers may struggle to get a mortgage
Delinquent student debt could soon create a new hurdle to homeownership in an already challenging marketplace. On May 5, the Department of Education will resume collections on defaulted federal student loans, according to its April 21 announcement. The pandemic stalled collections haven’t happened in March 2020. More than 5 million borrowers have not made a monthly student loan payment in over 360 days and sit in default. Four million borrowers …
Student loan borrowers at risk of garnished wages: What to know
Defaulted student loan borrowers will need to come up with a plan in the next few weeks as the Trump administration plans to restart involuntary collections for those who have missed payments. After five years, the Department of Education announced on Monday those in default, or those who have not paid on their loans for more than 270 days, could see financial consequences starting May 5 including blocked federal payments such as Social Securi…
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