TAMPA, Fla. — Borrowers will want to know where they stand with their student loans as soon as possible: The Department of Education will resume collections of defaulted federal student loans on May 5.
The Department hasn't collected on defaulted loans since the beginning of the pandemic.
"You don't default the very first day you don't make a payment,” said Christie Arkovich, the founding attorney for Arkovich Law. “You actually have a little bit of time. It's 270 days, basically nine months."
Arkovich said they're seeing a lot of people in delinquency status right now, and they don't even know it.
WATCH: Collections on defaulted federal student loans to resume in May
"They think they're on some kind of pause, forbearance, or deferment, and instead, they're having their credit reports dinged, usually by several hundred points,” said Arkovich.
Borrowers in default will get an email over the next two weeks.
The Department said that more than five million borrowers have not made a monthly payment in over 360 days and are in default.
"Collection is a whole different matter,” said Arkovich. “It's actually easy for the federal government to collect on a federal student loan by simply intercepting a tax refund that's due. They also can garnish wages very easily."
There are some important steps you should take now.
To determine if you're in default, you can check online or contact your servicer.
The two main ways to get out of default are rehabilitating or consolidating your loan.
“Make sure that you check your status to see what you are,” said Arkovich. “A lot of people wrongly assume that there’s some kind of pause on right now, and there’s not, and so I don’t want someone to be accidentally in default or delinquent and not realize that that’s happening to them.”
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