ALEX BUCKNAM
Asst. News Editor
In the past two weeks, major developments in Washington include the resumption of sending borrowers who have defaulted on their student loans to collections, and former U.S. Republican Representative George Santos being sentenced to more than seven years in prison.
On April 21, the Department of Education (ED) announced that involuntary collections for borrowers who have defaulted on their federal student loans will resume on May 5. Borrowers who are currently in default will start being referred to an offset program under the Department of the Treasury.
According to a press release from the ED, the department has not sent any borrowers to collections since March 2020.
Secretary of Education Linda McMahon stated, “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.”
The press release stated that five million borrowers have not made a payment in more than 360 days, and four million borrowers are in late-stage delinquency, meaning they haven’t made a payment in 91 through 180 days. As a result, the number of borrowers in default could approach ten million in the upcoming weeks and months.
Being in default on a student loan means the borrower has not made a payment in more than nine months.
Beginning May 5, the Office of Federal Student Aid (FSA) will begin notifying defaulted borrowers. Starting April 21 until the May 5 deadline, the FSA will encourage borrowers to contact the Default Resolution Group to enroll in a monthly payment plan, an income-driven repayment plan or a loan rehabilitation program.
According to the FSA website, defaulting on student loans can significantly harm the borrower’s credit score, which can make it harder to get a credit card or to buy a house or a car.
If borrowers do not begin repaying within 30 days after the notice, the Treasury Department will start wage garnishment. Under the Treasury Offset Program, the program can collect funds by withholding tax refunds, Social Security payments, federal pensions and even paychecks.
According to the offset program’s website, the department can take 100% of a federal tax refund, up to 15% of Social Security benefits and up to 100% of other government payments. If burrows do not have those funds, the program may begin garnishing paychecks until the loan is repaid or removed from default.
FSA stated borrowers can check if they are in default by logging into the FSA website. There is still time to fix your student loans if you are in default before the May 5 deadline.
On April 25, former Republican Representative George Santos of New York was sentenced to 87 months in federal prison after pleading guilty to federal wire fraud and aggravated identity theft in Aug. 2024.
In court, Santos said he was “humbled.” Santos continued, “I cannot rewrite the past, but I can control the road ahead.”
U.S. District Judge Joanna Seybert questioned his sincerity, stating, “Where is your remorse? Where do I see it?”
Santos was expelled from the House of Representatives in Dec. 2023, becoming the sixth member to be ousted from Congress. Santos was expelled through H.Res.878 of the 118th Congress.
The resolution states, “Whereas, on February 28, 2023, the Committee on Ethics of the House unanimously voted to impanel an Investigative Subcommittee. To review whether Representative Santos may have engaged in unlawful activity with respect to his 2022 congressional campaign, the [subcommittee] determined in its investigation that there was substantial evidence of violations of federal law [and] the Rules of the House.”
On May 10, 2023, Santos was charged in the Eastern District of New York with wire fraud, unlawful monetary transactions, theft of public money and making false statements on financial disclosure forms in the 2020 and 2022 election cycles.
The resolution was sponsored by Republican Representative Michael Guest of Mississippi’s 3rd congressional district. H.Res.878 passed by a 311-114 vote, with 105 Republicans and 205 Democrats voting in favor of the resolution and 112 Republicans and 2 Democrats voting against.
Before sentencing, Santos posted on X, “I want to thank all the people who have sent messages of support. Without you, I wouldn’t have had the strength to continue standing. I humbly thank you all for the amazing times we spent having thoughtful and deep-rooted conversations.”
Sources:
https://studentaid.gov/manage-loans/default
https://apnews.com/article/student-loan-debt-default-collection-fa6498bf519e0d50f2cd80166faef32a
https://fiscal.treasury.gov/files/top/TOP-rules-reqs-fact-sheet.pdf
https://apnews.com/article/george-santos-fraud-sentencing-prison-0961831af8870686853acb22d049c85e
https://twitter.com/MrSantosNY/status/1915406513755107733
https://www.congress.gov/bill/118th-congress/house-resolution/878/text