White House press secretary on Tuesday warned that Joe Biden‘s ‘illegal student loan bailout’ program is ending and those in default must pay back their loans.
On May 5th, the Department of Education will resume involuntary collections for borrowers with defaulted federal student loans.
Of the more than 42.7 million student loan borrowers – who owe a collective $1.6 trillion – more than 5 million have not made a payment in the past year, according to the Department of Education. That number is expected to grow as an additional 4 million borrowers are approaching default status.
‘If you take out a loan, you have to pay it back. It’s very simple. President Trump will not kick the can down the road anymore,’ Leavitt said at her press briefing.
‘Debt cannot be wiped away, it just ends up getting transferred to others. So why should Americans who didn’t go to college or went to college and responsibly paid back their loans, pay for the student loans of other Americans?,’ she noted.
‘If you take out a loan, you have to pay it back. It’s very simple,’ White House press secretary Karoline Leavitt warned those with student loans
Leavitt warned that anyone in default would face collections.
‘Borrowers will now be clearly expected to repay their loans, and those who default on their loan obligations will face involuntary collections,’ she said.
‘The government can and will collect defaulted federal student loan debt by withholding money from borrowers, tax refunds, federal pensions and even their wages. America is $36 trillion in debt. We must get our fiscal house in order and restore common sense to our country.’
Borrowers who have student loans in default will receive communication from Federal Student Aid in the upcoming weeks with information about their options, according to the Education Department.
A student loan becomes delinquent when a borrower doesn’t make a payment 90 days after its due date. If you continue to be delinquent on your loan for 270 days – or roughly nine months – then your loan goes into default.
Federal student loan repayments were paused during President Donald Trump’s first term in 2020 as a response to the COVID pandemic when Trump signed a stimulus package into law.
Then-President Joe Biden continued the pause as part of his campaign promise to relieve student debt, but the U.S. Supreme Court ruled in 2023 his plan unconstitutional because it didn’t have congressional approval.
Repayments began on Aug. 30, 2023, but the Education Department says only a little more than a third of borrowers is up-to-date with payments.
And it noted that nearly 2 million borrowers were unable to submit federal student loan payments through August 2024 because their paperwork wasn’t being processed.
Joe Biden paused federal student loan repayments as part of a campaign promise to young voters in the 2020 election
Education Secretary Linda McMahon blasted Biden’s plan as hurting students
Linda McMahon, the secretary of the Department of Education, said greedy colleges have ‘profited massively’ from the Biden forgiveness plan.
And she blasted Biden for dangling ‘the carrot of loan forgiveness in front of young voters’ during his 2020 presidential bid.
‘Colleges and universities call themselves nonprofits, but for years they have profited massively off the federal subsidy of loans, hiking tuition and piling up multibillion-dollar endowments while students graduate six figures in the red,’ she wrote in a Wall Street Journal op-ed on Monday.
‘Accountability is a two-way street. As we push to hold student borrowers to account, we will also push colleges to be responsible and transparent,’ she vowed.
