🎓 Important Update: Federal Student Loan Changes – April 2025

Big changes are underway for federal student loan borrowers. Here’s everything you need to know:

🗓️ End of the 5-Year Pause on Collections

The five-year pause on federal student loan collections officially ends on May 5, 2025.

• The original pause began in March 2020 during COVID-19 and was extended several times.

• Regular loan repayments resumed in October 2023, but collections on defaulted loans stayed paused—until now.
  📚 More information here.

🔁 What Happens Now?

Starting May 5:

• Tax Refund Offsets: Your tax refund may be withheld to repay your loans.

• Wage Garnishments: Employers could be required to withhold part of your paycheck.

• Social Security Garnishments: Up to 15% of Social Security benefits can be withheld for loan repayment.

Roughly 5.3 million borrowers currently in default will be impacted.

📣 Was This Restart Expected?

✅ Yes — The U.S. Department of Education previously announced that collections would restart in 2025.

✅ Borrowers Have Been Notified — Communications have been sent to inform borrowers about the changes and explain available support options.
📚 Read the official announcement.

💡 Available Relief Options

Fresh Start Program:

• Helps borrowers exit default by making a series of voluntary payments.

• Lets you re-enroll in Income-Driven Repayment (IDR) Plans.
  📚 Learn more about Fresh Start.

Income-Driven Repayment (IDR) Plans:

• Even with the SAVE Plan currently paused due to legal challenges, you can still apply for IBR, PAYE, or ICR.
  📚 Updates on IDR Court Actions.

Married Borrowers Update:

• Those who file taxes separately can now exclude their spouse's income, potentially lowering their monthly payments.
  📚 More info.

📞 Need Help?

• Check Your Loan Status: Log into your account at StudentAid.gov.

• Contact Your Loan Servicer: They can walk you through your specific options.

• Stay proactive: Taking action now can help avoid collections and penalties later!

If you have any questions about how this might impact your homeownership goals, I’m here to help! 🏡

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