Student Loan Borrowers Flip Out Over Repayment Restart: 'Kiss My Ass'
For those who have defaulted on their student loans — there are 5.3 million or so in this category — the federal government is about to come knocking on your door, or paycheck to get their money.
The Department of Education announced Monday that it will once again start collecting on defaulted student loans starting in May. "American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies," Education Secretary Linda McMahon announced.
How will the government get its money? According to McMahon's orders, they'll go after tax refunds, federal salaries and "other benefits," according to the Associated Press. As for those who don't work for the federal government or have tax refunds coming, wage garnishment is coming.
Debt collectors are about to get some serious work.
Needless to say, the news is hitting home for those who have spent the last five years banking on Joe Biden to cancel debt.
How bad is it out there for student loan debt? "Only one-third of the 38 million Americans who have borrowed money to pay for college or graduate school and should be making payments actually are, according to government data," the New York Times reported Monday.
Add in the credit card debt that Americans are swimming in and you have a problem here that has been boiling and boiling as Americans get dumber and dumber with their finances.
While people aren't paying their student loans, they're also not paying off credit cards. "The share of outstanding credit card debt that is more than 90 days delinquent rose to 11.4% in the fourth quarter, per New York Fed data, the highest in 13 years," Axios reported in March.
How much credit card debt are Americans carrying? Oh, somewhere around $1.21 trillion.
What's the end result here?
More people are renting, which has led to higher rents "than ever before" and a 2024 report that stated Americans who rent spend 30% of their income on rent costs and 12.1 million spend "more than 50%.
In other words, we're in a mess.