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Friday, May 9, 2025

Having trouble keeping up with the chaos of the student loan system? (Student Borrower Protection Center)

 

Are you having trouble keeping up with the chaos of the student loan system? Don’t worry; we got you. There’s a lot going on right now and we’re here to break it all down. Here are some of the most pressing things that happened this week.


On Tuesday, Senator Patty Murray (D-WA), the Ranking Member of the U.S. Senate Appropriations Committee and senior member of the Senate Health, Education, Labor and Pensions (HELP) Committee chaired an education forum to spotlight the Trump Administration’s radical effort to dismantle the U.S. Department of Education (ED). Tasha Berkhalter, a U.S. Army veteran and student loan borrower who had her debt discharged by the Biden Administration after being defrauded by a predatory for-profit college, gave powerful testimony at the hearing.

Watch Tasha’s testimony here:

The Trump Administration announced a couple of weeks ago that it would begin collections on student loans for the first time in five years, beginning this Monday, May 5. ED started sending borrowers emails this week to let them know that the Treasury Offset Program—which lets them take tax refunds and federal benefits like Social Security—was starting. ED said administrative wage garnishment is expected to resume later in the summer. There are currently 5.5 million federal student loan borrowers in default who should be receiving this email, and another 8 million delinquent folks who could face these consequences later this summer. If you are currently in default and unsure of what to do, check out this great resource from the National Consumer Law Center. Our Deputy Executive Director Persis Yu was featured on both PBS News Hour and CBS Mornings this week to explain what is happening. 

Watch Persis on PBS here:

On Monday, we submitted a comment letter to oppose the Trump Administration's efforts to implement its Project 2025 agenda through a process called negotiated rulemaking (Neg Reg). The Trump Administration is threatening a massive overhaul of the student loan safety net, including the Public Service Loan Forgiveness (PSLF) program and affordable repayment options. 184 organizations joined SBPC and Democracy Forward in signing on to the letter. These organizations will keep fighting on behalf of borrowers!

ICYMI, here is a roundup of other coverage this week:

  • SBPC Executive Director Mike Pierce broke down the restart of collections on defaulted borrowers with Danielle Douglas-Gabriel of The Washington Post on NPR's 1A. He also spoke with KCAL News, The Associated Press, Investigate TV, and more!
  • SBPC Counsel Khandice Lofton spoke on CBS News about the struggles of borrowers right now.
  • SBPC Policy Director Aissa Canchola BaƱez discussed on NPR’s Morning Edition how collections will, in particular, harm older borrowers. She also spoke with LAist about PSLF and The Hill about the House Republicans’ budget reconciliation bill, and answered borrowers' questions on ABC7.
  • SBPC Legal Director Winston Berkman-Breen was featured in The New York Times commenting on the chaos borrowers are facing right now. He also spoke with Gray Media about this.

Hang in there,


Amy Czulada

Outreach & Advocacy Manager

Student Borrower Protection Center

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