The tears have commenced. And the cheers have begun.
On May 5, the federal government will resume collections on student loans in default, a job that the Biden administration unlawfully abandoned in a bid to get the youth vote.
Deadbeats wailed and gnashed their teeth on social media, complaining they might suffer garnished wages and confiscated income tax refunds. Those who paid their debts don’t want to hear it. You took out a loan, they say, and must now pay it back.
Almost $2 trillion of taxpayer money is uncollected.
Deadbeats in the Millions
The Department of Education’s Office of Federal Student Aid (FSA) will begin collecting on May 5. The department stopped collecting in March 2020 during the Trump administration because of the China Virus panic.
“While Congress mandated that student and parent borrowers begin to repay their student loans in October 2023, the Biden-Harris Administration refused to lift the collections pause and kept borrowers in a confusing limbo,” the department explained:
The previous Administration failed to process applications for borrowers who applied for income-driven repayment and continued to push misguided “on-ramps” and illegal loan forgiveness schemes to win points with borrowers and mask rising delinquency and default rates.
That, Education Secretary Linda McMahon said, was illegal. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear,” she said:
Hundreds of billions have already been transferred to taxpayers. Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook.
Frighteningly, the department reported, “2.7 million borrowers owe more than $1.6 trillion in student debt.” Five million deadbeats haven’t made a monthly payment in a year “and sit in default — many for more than 7 years — and 4 million borrowers are in late-stage delinquency (91-180 days).”
That means some 10 million borrowers might default within “a few months,” the department continued. If so, some 25 percent of the federal loan portfolio will have defaulted. And just 38 percent of borrowers are current or repaying their loans. “Most of the remaining borrowers are either delinquent on their payments, in an interest-free forbearance, or in an interest-free deferment. A small percentage of borrowers are in a 6-month grace period or in-school,” the department reported.
And thanks to the Biden administration, for whom spending tax money was no object, another nearly 1.9 million borrowers haven’t begun repayment because the administration paused processing.
The U.S. Supreme Court struck down Biden’s unlawful loan forgiveness in June 2023.
On May 5, Get Your Checkbook Out
Beginning May 5, deadbeats will receive emails from FSA “urging them to contact the Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.”
Wage garnishment begins later in the summer.
But that won’t happen until the freeloaders get plenty of notice, “with clear information about their payment options to put them on a productive path toward repaying their federal student loans,” the department explained. FSA will offer resources to help pick the “best repayment plan.”
The department will also bring together all the parties involved in student loans to help send a message: “Parents and student borrowers — not taxpayers — must repay their student loans. There will not be any mass loan forgiveness.”
Speaking about the program at a White House presser, spokesman Karoline Leavitt called the mass default “unsustainable, unfair, and a huge liability for American taxpayers.”
“Debt cannot be wiped away,” she continued:
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? The Trump administration will never force taxpayers to pay student loan debts that don’t belong to them. Student loan borrowers need clarity and we’re finally giving it to them. Borrowers will now be clearly expected to repay their loans.
Reaction
Taxpayers reacted as expected: Borrowers must pay back what they borrowed, not fob their debts off to taxpayers.
“Pretty easy to understand,” Nobody Special wrote. “If you have a loan, you need to repay it.”
“It’s pretty straightforward — if you take out a loan, you should be expected to pay it back,” another wrote.
Wrote Dyler Turden:
About time. Paying back student loans was mandatory until the @DNC wanted to buy votes. I paid mine back, took ten years, but paid every penny.
One of those who didn’t attend college — among the millions whom Leavitt mentioned — agreed. “What kind of adult would expect the rest of America to pay for their legal obligations?” Vickiem wrote:
Were the loan papers signed by “America”? I didn’t have the luxury of a college education, [neither] my family nor I could afford it. And now these entitled, yes entitled, brats think I’m responsible for paying for their education. No. Sorry not sorry.
There also came the caterwauling.
“This is gonna hurt the people that are already struggling the most,” a woman with an ox ring in her nose complained. “They are really just trying to absolutely cripple as many people as f***ing possible at this point.”
“[Conservatives are] saying, ’Oh, thank God, all these freeloaders are going to pay back the money that they borrowed,‘” wailed a bearded fellow also sporting an ox ring — but with the added accoutrements of ear gauges large enough to carry a large Tootsie Roll. “Let me tell you something. I didn’t borrow a g*dd**n dime. I was 17 years old.”
His mom, he said, threatened to throw him out of the house and “make me homeless” if he didn’t borrow money for college.
“I’m not alone in this. I know that many, many children were put in the same situation,” he whined:
We should not have our wages garnished. The boomers should have their g*dd*** retirement accounts and Social Security checks garnished for forcing college on to us, forcing us to take unsustainable loans. It’s just screwed up. Student loan forgiveness is the only ethical choice. And the boomers aren’t gonna give it to us, so we need to go after their money.
