More than 40 million Americans will have to making payments starting in October after a COVID-19 pandemic-era freeze on loan repayments comes to an end.
Borgman, 43, left school with her bachelor's degree and no student debt. But she needed to borrow $60,000 to go to graduate school to fulfil her dream of working as a speech pathologist., bar a couple of years when she was in forbearance. The amount she now owes is more than double what she initially borrowed.
"I have medical debt I'm still trying to pay off and I currently pay mine and my son's health insurance out of pocket," she said."I also recently started a new job where I won't earn full pay until after my initial four-month new employee evaluation period. I'm worried I'll have to go into forbearance again and am currently just hoping God makes a miracle happen.
"Once the loan is in default, the government can collect the loan by seizing a portion of the borrower's wages, seizing their tax refund [including their Earned Income Tax Credit and Child Tax Credit], or seizing a portion of the borrower's Social Security benefits," Kyra Taylor, a staff attorney at the National Consumer Law Center, told."There is no statute of limitations on federal student loans, so the government can collect defaulted loans indefinitely.
Taylor added that there will be a great deal of confusion when loan payments resume as millions of accounts were transferred from one servicer to another during the payment pause.
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