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Student Loan Collections Resume Today

Account Recovery

After a five-year hiatus, the Department of Education will resume involuntary collections on federal student loans today, impacting millions of borrowers already in default. With fewer borrowers making payments, the ripple effect will likely extend beyond student loan servicers, impacting industries that rely on consumer spending.

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Bankruptcy Court Blocks Collection Efforts on Discharged Student Loans

Account Recovery

A Bankruptcy Court judge in New York has granted a plaintiff’s motion for a preliminary injunction that will block the collection efforts on thousands of student loans that individuals allege were discharged in bankruptcy, ruling that there was no legal interest in continuing to collect on these debts. Judge Elizabeth S.

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Ed. Dept. Delays Start of Student Loan Collections Until 2025

Account Recovery

The Department of Education is making its student loan collection on-ramp a little longer, announcing that it will start reporting late or missed student loan payments to credit bureaus in early 2025, a delay from the originally planned start date this month.

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CFPB Supervisory Highlights Report Details Issues with Student Loan Debt Collection

Account Recovery

The Consumer Financial Protection Bureau yesterday released a special edition of its Supervisory Highlights report, sharing its findings from examinations related to student loan refinancing, private lending, servicing, and debt collection. Why it matters:Student loans represent $1.77 trillion in U.S.

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Student Loan Default Spike Leads to ‘Grave’ Consequences for Consumers: NY Fed

Account Recovery

While other debts saw slight reductions, a significant rise in student loan delinquencies signals an emerging concern. The resumption of delinquent student loan reporting after a pandemic hiatus has led to a sharp increase in the number of borrowers facing serious payment issues.

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Outgoing Administration Publishes Blueprint to Prevent Student Loan Defaults

Account Recovery

On its way out the door, the Department of Education has published a memo outlining the steps that the new administration should take to prevent individuals from defaulting on their student loan payments and the importance of continuing the actions that have been taken by the outgoing administration.

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Student Loan Debt Relief Scammers Sentenced

Account Recovery

The Attorney General of California announced that a group of individuals involved in a student loan debt relief scam have been sentenced — three of them receiving jail time — and paying more than $330,000 in restitution to victims who were “preyed on” because they were struggling to repay their student loans.