It's about time: Bring back those student loan collections  ...Middle East

This week, the Department of Education announced that on May 5 it will begin collecting on defaulted student loans. This will be the first time since March 2020 that borrowers who have either chosen not to or been unable to make their student loan payments will once again face significant financial consequences for their delinquency.  

Borrowers in default will be subject to involuntary collection efforts, including wage garnishment, the withholding of pension benefits and tax refunds, and negative credit reporting. These actions can damage credit scores, limiting borrowers' ability to buy or rent a home, take out a car loan, or secure employment. 

Thank you for signing up!

Subscribe to more newsletters here

This change will affect a broad swath of borrowers. More than 5 million are already in default, and another 4 million are in late-stage delinquency — that is, they are likely to default in the coming months. Some of these are due to true financial hardship, while others may be caused by borrowers simply being disengaged from the repayment process after a lengthy pause and many false promises of cancellation from the Biden White House. 

It’s important to acknowledge that for many borrowers, the return to repayment won’t just be a logistical adjustment — it will be a financial and emotional jolt. After three years of paused payments and mixed messaging from Washington, many borrowers are now facing a system that feels confusing and, to some, even punitive. Some are struggling to navigate a complex web of repayment options. Others are dealing with rising costs of living, stagnant wages and degrees that haven’t delivered the career security they were promised.  

These frustrations are real, and they deserve to be taken seriously. But a system that permanently suspends consequences for nonpayment doesn’t fix those problems — it just hides them.  

A more compassionate and effective approach is one that acknowledges the difficulty of repayment while still expecting shared responsibility. That means improving communication, simplifying access to affordable repayment plans, and ensuring that borrowers know their rights and options before falling into default. It also means addressing the deeper issues of affordability and accountability in higher education. We can — and must — support struggling borrowers without dismantling the principle that student loans should ultimately be repaid. 

The move is likely to be controversial, as it’s easy to sympathize with borrowers suddenly confronted with a financial obligation they assumed they might never have to repay. But the truth is, this is a necessary and overdue correction. Halting the collection of federal student loans was never a costless policy decision. Every unpaid dollar has continued to be financed by American taxpayers, resulting in either higher taxes or cuts to other public programs. Holding borrowers accountable for their debts, rather than shifting the burden to taxpayers who never agreed to take it on is the right and responsible course of action. 

Critics of the federal lending system focus on the plight of borrowers who genuinely struggle to repay. But they often overlook the generous safety nets that remain in place. Income-driven repayment plans are designed to ensure that monthly payments are affordable, and any remaining debt is forgiven after a set period. 

In fact, for most borrowers, the total amount repaid is less than what was initially borrowed. That’s because, over the past 15 years, these safety nets have expanded considerably — long before Biden launched his sweeping push for widespread debt cancellation. 

The move announced by the department under the Trump administration is a painful but necessary course correction. Without it, we risk living in a world where borrowers can take on loans without the expectation of repayment, and where colleges are incentivized to raise prices unchecked. The result is wasteful spending ultimately charged back to taxpayers. 

While this policy shift is a step in the right direction, it cannot stand alone. The next phase of reform must focus on preventing unaffordable debt from being issued in the first place. That means placing real limits on how much students can borrow for low-value degrees and holding colleges accountable when their programs routinely leave graduates with poor job prospects and unmanageable debt. If institutions benefit from federal dollars, they should also bear responsibility for the outcomes those dollars produce. 

A student loan system that works must do more than collect debts — it must protect future borrowers from taking on loans they have little chance of repaying and ensure that higher education lives up to its promise of economic mobility. That’s the vision we should be working toward. 

Beth Akers, Ph.D., is a resident fellow at the American Enterprise Institute and former staff economist with the Council of Economic Advisers during the George W. Bush administration.  

Read More Details
Finally We wish PressBee provided you with enough information of ( It's about time: Bring back those student loan collections  )

Also on site :

• British brothers worth $9 billion quit U.K. as wealth exodus grows
• China supports free trade, central bank governor says in Washington meeting, CCTV reports
• Man shot by police at Toronto airport