A new effort to collect outstanding student loans is expected to launch this summer, with thousands of borrowers contacted for the first time since the pandemic.
According to Politico, officials said the Treasury Department and the Education Department are preparing to launch a collection program in July targeting borrowers in default.
The report said around 500,000 borrowers could be included initially, although a Treasury spokesperson disputed this figure without providing an alternative estimate.
More aggressive measures, such as wage cuts, are not expected to begin immediately and may be delayed until after the midterm elections.
The initiative is part of a broader plan to transfer management of the $1.7 trillion student loan portfolio from the Education Department to the Treasury.
An Education Department spokesperson told Politico the “information” regarding the program was “incorrect”, but did not clarify further.
“ED and Treasury are currently collaborating on how to best implement the first phase of the partnership,” the spokesperson said.
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