Student loans in default to be referred to debt collection, Education Department says

News

Student loans in default to be referred to debt collection, Education Department says

2025-04-22 08:52 Last Updated At：09:01

WASHINGTON (AP) — The Education Department will begin collection next month on student loans that are in default, including the garnishing of wages for potentially millions of borrowers, officials said Monday.

Currently, roughly 5.3 million borrowers are in default on their federal student loans.

The Trump administration ’s announcement marks an end to a period of leniency that began during the COVID-19 pandemic. No federal student loans have been referred for collection since March 2020, including those in default. Under President Joe Biden, the Education Department tried multiple times to give broad forgiveness of student loans, only to be stopped by courts.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said.

Beginning May 5, the department will begin involuntary collection through the Treasury Department's offset program, which withholds government payments — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government. After a 30-day notice, the department also will begin garnishing wages for borrowers in default.

The decision to send debt to collections drew criticism from advocates, who said borrowers had experienced whiplash and confusion with the changing student loan policies between the Biden and Trump administrations.

“This is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country,” said Mike Pierce, executive director of the Student Borrower Protection Center.

Already, many borrowers have been bracing for obligations coming due.

In 2020, President Donald Trump paused federal student loan payments and interest accrual as a temporary relief measure for student borrowers. The pause in payments was extended multiple times by the Biden administration through 2023, and a final grace period for loan repayments ended in October 2024. That meant tens of millions of Americans had to start making payments again.

Borrowers who don't make payments for nine months go into default, which is reported on their credit scores and can go to collections.

Along with the borrowers already in default, around another 4 million are 91 to 180 days late on their loan payments. Less than 40% of all borrowers are current on their student loans, department officials said.

Layoffs at the Federal Student Aid office at the Education Department have made it harder for students to get their questions answered, even if they wanted to pay their loans, said Kristin McGuire, executive director for Young Invincibles, a group that focuses on economic security for younger adults.

And questions are swirling about certain income-driven repayment programs after a February court ruling blocked some of the payment plans. Borrowers in the more lenient, Biden-era SAVE Plan were placed in forbearance, in which borrowers receive relief from payments but still accrue interest. The Education Department in February took down applications for income-driven repayment programs — which tie a monthly payment to a person's income level — only to bring them back online a month later.

“Things are really difficult to understand right now. Things are changing every day,” McGuire said. “We can’t assume that people are in default because they don’t want to pay their loans. People are in default because they can’t pay their loans and because they don’t know how to pay their loans.”

For borrowers in default, one step to avoid wage garnishment is to get into loan rehabilitation, said Betsy Mayotte, president of The Institute for Student Loan Advisors.

Borrowers must ask their loan servicer to be placed into such a program. Typically, servicers ask for proof of income and expenses to calculate a payment amount. Once a borrower has paid on time for nine months in a row, they are taken out of default, Mayotte said. A loan rehabilitation can only be done once.

Biden oversaw the cancellation of student loans for more than 5 million borrowers. Despite the Supreme Court's rejection of his signature proposal for broad relief, he waived more than $183.6 billion in student loans through expanded forgiveness programs.

In her statement Monday, McMahon said Biden had gone too far.

“Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook,” she said.

Associated Press writer Adriana Morga in New York contributed to this report.

The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Scottie Scheffler returns to hometown Byron Nelson, takes 1st-round lead with 10-under 61

2025-05-02 08:56 Last Updated At：09:02

McKINNEY, Texas (AP) — Scottie Scheffler is happy to be back at his hometown event and showed it.

Cameron Champ isn't far from familiar territory, either, which is a good thing considering he got the call that he was in the Byron Nelson as an alternate about 18 hours before his tee time.

Scheffler made the turn in 29 on his way to a 10-under 61 on Thursday for a two-shot lead over Rico Hoey and Jhonattan Vegas, with Champ among seven players another shot back at 64.

Defending champion Taylor Pendrith shot 67 with players allowed to lift, clean and replace their shots in the fairways after the par-71 TPC Craig Ranch got heavy rainfall Wednesday.

The top-ranked Scheffler outshined fellow hometown star Jordan Spieth with the former Texas Longhorns paired together along with Si Woo Kim, a South Korean who also calls Dallas home and was showcased in an event sponsored by CJ Group, a conglomerate based in his home country.

Kim shot 67, capping his round with a lofty chip-in for eagle at the par-5 18th and rolling onto his back in celebration. Spieth is 2 under. Vegas, another Texas alum, had a bogey-free round along with Scheffler and Hoey.

The others at 7 under with Champ are Stephan Jaeger, Michael Thorbjornsen, Eric Cole, Andrew Putnam, Patton Kizzire and Will Gordon.

Scheffler missed last year's event in Dallas' northern suburb of McKinney for the birth of his first child, son Bennett.

“Jordan and I love playing here. This tournament has meant a lot to us over the years,” Scheffler said. “Obviously last year I was missing for some pretty good reasons. I wasn't too sad about what was going on in my life at the time.”

Back then, he had 10 wins combined before May over a three-year stretch, including the Masters and Players Championship twice each. Now, Scheffler is still seeking the first victory of 2025.

Not that he was playing poorly before posting his lowest round of the year. Scheffler finished fourth as the defending champion at Augusta and has four other top-10 finishes this year.

“I wouldn't say anxious or eager, anything like that,” the 13-time winner said of seeking his first victory in 2025. “I got off to a pretty good start today, and there's three more days of the tournament. Just focused on going home and getting some rest.”

Scheffler birdied four consecutive holes on the front nine and added one more before putting his approach at the par-5 ninth inside 5 feet for an eagle to get to 7 under.

A chip for birdie stopped on the lip at the par-4 11th, the second of three consecutive pars before he pulled even with Hoey with a birdie at 13. Scheffler took the lead by putting his tee shot on the stadium hole — the par-3 17th — inside 3 feet.

Hoey, a 29-year-old from the Philippines seeking his first PGA Tour victory, started with eight pars on the back nine before an eagle on 18 triggered an 8-under finish over his final 10 holes. His 63 tied his career low on the PGA Tour. Hoey's best finish this year also was in Texas, a tie for 11th at the Houston Open.

“It’s been up and down, but from the start of the last season and comparing it, I think I’m doing a way better job,” said Hoey, who won on the Canadian tour in 2017 and the Korn Ferry circuit two years ago. “Just feel like there are rounds I’ve been clicking; other rounds I haven’t put it up. Kind of nice to get the momentum rolling now.”

Champ, who lives in Houston and played at Texas A&M, was home when he got the call that he was replacing Gary Woodland, who withdrew. He made it to the Dallas area Wednesday night and countered two bogeys in his first three holes with nine birdies.

The 29-year-old from California won three times from 2019-21 but missed 35 of 55 cuts over the previous two years. This is just his fourth start of 2025.

“Considering last year, how many cuts I missed by one, it was like 11 or 12 or something, I haven’t really been playing that bad,” Champ said. “The last two years is probably the hardest I’ve ever worked. Feel like my physical abilities are there. It’s just getting back to the right mental state.”

Spieth and Danny Walker had to pause to clean spikes after wayward tee shots into muddy territory. Walker's cleaning delay lasted several minutes, including others helping by splashing the soles with bottled water.

Walker, playing in the group ahead of Spieth, ended up with a bogey on the par-4 11th on his way to a 68. Spieth scrambled for a par-4 at No. 3 after barely missing the water while putting his tee shot in a waste area.

AP golf: https://apnews.com/hub/golf