Biden Administration Offers New Start, for Student Loan Borrowers in Default.
CNBC reports that as the Biden Administration announced another four-month pause on student loan payments.
There was more good news for borrowers who had fallen behind on their payments before the COVID-19 pandemic.
The U.S. Department of Education says it could soon pull millions of borrowers out of default by marking their accounts as current.
Officials believe borrowers deserve a "fresh start" on the repayment of their loans.
By eliminating the effects of defaulted and delinquent loans, the U.S. Education Department wants to help borrowers "reenter repayment in good standing.".
Higher education experts say delinquencies start to appear on credit reports after three months, though defaulted loans may take up to a year.
Officials say delinquent accounts will reflect current status automatically.
According to CNBC, wage garnishment and collections will also end.
Student loan repayments should resume in September, though experts say another extension could be possible.
If borrowers experience difficulty repaying their student loans, officials say to apply for economic hardship or unemployment deferment.
Which caps the amount on monthly payments and cancels any remaining debt after 20 to 25 years.
Which caps the amount on monthly payments and cancels any remaining debt after 20 to 25 years
