Collections on defaulted student loans will resume on Monday, May 5.
After years of deferments, forbearance and court rulings on student loans following the COVID-19 pandemic, the Office of Federal Student Aid's announcement to resume collections — which last took place in March 2020 — is a return to normalcy for the office.
"They can start to potentially take tax refunds away from you, withhold federal benefits, or potentially garnish your wages, which has gathered a lot of attention recently," Landon Warmund, certified student loan professional with the Financial Planning Association of Greater Kansas City, said.
There's a lot of different information circulating about student loans.
“There’s so much happening and so much confusion and conflicting information you get about your student loans, that I think when you call, you can have a three-hour wait time," Jeremy Clarkson, a local teacher and student loan borrower, said.
Clarkson said he's been met with confusion regarding the current state of federal student loans.
"(18, 19 years old), when I got my loans, I knew the expectation of paying it back," he said.
Clarkson said he also understood the repayment plans he agreed to. Since he's a teacher, he repays his loans through the Public Service Loan Forgiveness (PSLF) plan.
Government and non-profit employees are eligible for PSLF. After those who are eligible have made 120 qualified monthly payments, roughly over 10 years, the entirety of their direct student loans is forgiven.
"I can't find information on how many qualifying payments I have made, and how many are being applied to it," Clarkson said.
He said he's also finding different information about his student loans on his loan servicer's website and the Federal Student Aid website.
There are conversations on the federal level about changing the PSLF repayment program.
"I want to know, is this program in potential danger of anything?" Clarkson said.
Warmund said at this point, it doesn't look like teachers or government employees would be impacted by the proposed changes to PSLF.
“Be very patient with the whole process of everything going on right now," Warmund said. "There’s a lot of headline news, there’s a lot of information that’s getting tossed around, there’s a lot of proposals that are being put out about potential changes to student loan programs.”
Warmund said that if any changes would impact a borrower, either their student loan servicer or the U.S. Department of Education should notify them by email or mail. He said to make sure your address is up to date on studentaid.gov.
He also said you can visit Federal Student Aid's website to check the status of your loan and whether it's in default.
Court rulings surrounding income-driven repayment plans have caused confusion. If you're repaying under the SAVE plan, it's likely your payments are in forbearance.
"On the SAVE forbearance, we're kind of on the whim of our federal government right now on when that's going to end," Warmund said.
Warmund said for now, those who are on the SAVE plan should continue to make payments if they can and want to.
“I think it’s really important if you’re in that SAVE forbearance to really consider that you are in an interest-free forbearance, which gives you a chance to make those interest-free payments toward your student loans," Warmund said.
For those who applied for a general forbearance, interest will continue to build on those loans.
For more information on how to get your loans out of default, click here.
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KSHB 41 reporter Lily O’Shea Becker covers Franklin and Douglas counties in Kansas. Share your story idea with Lily.
