Federal student loan borrowers, by default, have until May 5, 2025, to make repayment plans before the collections process begins.
According to the U.S. Department of Education, more than 5 million borrowers are currently in default, and another 4 million are in late-stage delinquency.
If those borrowers do not contact the Default Resolution Group (https://myeddebt.ed.gov/), wage garnishment could begin by late summer.
Gwen Thomas is a mom, author, and nationwide advocate for students and families.
Through her non-profit, Fresh Perspectives College & Career Readiness Program, she helps families navigate scholarships and financial literacy before taking on student loans and debts.
She wrote the book The Parents’ Smart Guide to Sending Your Kids to College Without Going Broke about the process.
These days, she says she’s been getting many more calls from people with student loans, working to understand how to pay them back.
“College debt is something that prevents young people from growing when they’re starting their families and coming out of college,” said Thomas.
When it comes to student loans, she makes sure the families she works with understand “you cannot write off college debt in bankruptcy.”
Krystal Boykin is one of the people who have come to her for help. The attorney, originally from Indiana, came to Michigan to pursue her law degree at Michigan State University.
“I owe a lot, over 300k. That’s for my undergrad work and law school,” said Boykin.
She was current on her loans but still received a notice explaining that her payments were going up significantly.
“I was told that my payments would be $4,000 a month after all of this litigation happened with student loans, income-based repayment plans,” Boykin said.
She wasn’t in default, but that amount could have easily put her there.
“I wouldn’t have been able to pay for my car, cell phone, wouldn’t have been able to pay living expenses, food,” Boykin said.
She called and learned she was eligible for a graduate repayment program with three options.
Boykin chose to pay $59 a month over the next two years.
She’s unsure what happens after that but is relieved and suggests that everyone call their loan provider to see what repayment programs they may be eligible for.
