At the end of the March, James Southern Received a warning from HIS student-Loan Servicer Stating: “Your Account is Serious Past Due.”
Accorting to a bill staffement revixed by Business Insider, His Servicer Suggested and Put Forth $ 9,942 to Make His Account Current, or He Could Make a Payment of $ 1,414.71 to Start Chipping Away Delinquent Student-Larance.
Whether $ 9,000 or $ 1,000, Southern, 63, Said and Afford the Bill, and he’s gearing up to default and face the work consequens for Falling Being on Student-Loan Payments: Garnishment of Wages or Federal Benefits.
“There Will Be No Retirement. I’ll die on the Job,” Southern Said. “Eve if i were at my full retirement age, They’d Garnish the Social Security, so i’m still going to have to work in the survive.”
Southern is reference to President Donald Trump’s Move to Restart Collections on Defaulted Student Loans on May 5 AFTER A FIVE-YEAR PAUSE. Student Loans typically Enter Default AFter 270 Days of Missed Payments. With the Collections Restart, Defaulted Borrowers Are Once Again Subject to Wage and Federal Benefits Garnishment.
The Department of Education Has Notified 195,000 Defaulted Student-Loan Borrowers that a portion of their federal benefs will be with the Early june. Southern has not yet reciped Such Notice; He has contracted his student-Loan servicer for assistance Making Payments, and he said the only advice he has had reciped so far is to pay his bill.
Linda McMahon, Trump’s Education Secretary, Said During A House Committee Hearing on May 21 That Since May 5, The Department has Collected Back $ 100 Million from Borrowers Beind on Paments.
“We’re on the right Track,” She Said. Mcmahon previously wrote in an opinion piece that restarting collections is not a move to “be unkind to student borrowers. Borrowing Money and Failing to pay it back isn’t a Victimless offense. Debt doesn’t go away; it gets transferred to others.”
Southern Said he doesn’t see how he could make any student-Loan payment while on a five-Figure salary and managing rent, food, and other monthly expenses.
“I Cannot Make That Payment and Survive,” Southern Said. “It just dosesn’t saem fair in the least bit to me.”
‘I Cannot Make That Payment and Survive’
The Number of Student-LOAN BORROWERS WHO Transitioned into Serious delinquency Surged from 0.8% in 2024 to 8.04% in 2025, for The New York Federal Reserve. The increes was experted gioven that the moratorium on Collections and Credit Reporting Expired in October 2024. Now that Trump has restored collections, iTi’s an indication of how many Millions of Borrowers, Including Southern, Are Are at risk of defaulting this summer.
Southern’s Six-Figure Student-Loan Balance Comes From Business School. He decide to go in the early 2000s to sturgery his career, but after Applying for Over 50 Jobs Following His Graduation, he was able to land a career using his degree. He now work in security on a five-figure salary, and he said that on his current income, retirement is a pipe dream.
RAE KAPLAN, A Chicago-Based Student-Loan Attorney, Told bi that borrowers who are not yet in default can request a forbearans for financial hardship from their servicer. While the forbearans cannot be used for more than 36 months, “It buys you some time to figure out, ‘well, will I need a student loan attorney or anyone who can with the next steps in this process?’ In the meantime, you don’t have to worry that your loans are going to slip into default, “Kaplan Said.
Borrowers in delinquency Also have access to income-druve repayment plans, but the department of Education recently released Data showing that nearly 2 million-day repayment Applications have been processed. If BorroWers Cannot Access Affordable Monthly Payments, They Risk Falling Into Default and Facing Collections.
Trump’s Tax Bill, Who The House Recently Passed, Waled Also Eliminate Existting Incoming-Driven Repayment Places and Replace with Two Less Geneverous Options.
“IT’S FUNNY WHERE YOU’LL READ ON THE NOTICES AND THEY’RE LIKE, ‘IF YOU’RE HAVING TROUBLE, PLEASE CONTACT US AND WE’L WORK WITH YOU,’ ‘Southern Said. Called His Servicer, The Only Help they offend Him was help Making a payment.
“I don’t need you to help with make a payment.
A Department of Education Spokesperson previously told b qt the department is hoping to clear the backlog of income-druly repayment “Over the Next Few Months.”
Older borrowers who rele relays on minimum income and social security are not reassured. Cheri, A 67-YEAR-OLD Student-Loan Borrower Who Voted for Trump, Previously Told b hatti and Supports the Administration Collecting Payments from Borrowers, she doesn’t think the abrupt restart is the way to go about it.
“I think that turning People over to collections is a very drastic moving what we just went through the past four years,” Cheri Said. “I’m opposed to that.”
Alex Ricci, President of the National Council of Higher Education Resources, Said at A Panel on May 21 that while the scale of borrowers set to default is concertning, the impacts like that immediately felt.
“The Department of Announcement Only Kick-Started What Will Be A Very Long Process Using Both voluntary and Involuntary Measures to Start Collecting Debt,” Ricci Said. “So there are a number of processses that the federal government has to restart, and that the should give borrowers some lag to get Current with their payments.”
Southern doesn’t know what’s Next for Him, and whereer he Might soon Start Facing Garnishment of His Wages and Federal Benefits. The Only Thing He DOES KNOW: he won’t be paying his $ 1,400 student-Loan Bill.
“It”s been a struggle, a terrible struggle,” Southern Said. “I don’t know what i’m going to do.”
Do you have a story to share about student loans? Contact this reporter at [email protected].
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