Have a Student Loan? Massive Changes are Coming for NJ, PA & NY Borrowers

If you have a student loan, heads up!

Massive changes are coming and they could affect a MAJORITY of the borrowers in New Jersey, Pennsylvania and New York.

The changes will happen sooner than you may think, so let’s take a look at what’s really going on here.

Federal Student Undergo Massive Changes, Five Years in the Making

Since March 2020, federal student loan borrowers have been protected from having their loans sent to collections.

This all started in the COVID-19 pandemic. Payments were paused in March 2020 as American struggled with the effects of the pandemic on their finances.

Get our free mobile app

Payments have since resumed. However, some of the protections that were initially in place have been extended including protections for loans in default.

Perhaps most notably of those changes? Federal student loans that are currently in default for nonpayment can once again be referred for collections.

MORE FROM 94.5 PST:  Two Philly Area Hospitals Set to Close

This will start sooner than you may think, by the way. Officials say it’ll start as early as May 5th.

It’s currently estimated that it will affect 5.3 million borrowers who are currently in default.

But the fears for borrowers don’t stop there…

Nearly 60% of Federal Student Loan Borrowers Could Face Wage Garnishment

The updated policies include the possibility of garnishing wages for borrowers who go into collections via the Treasury Department.

And while only 5.3 million student loan borrowers are currently in default (meaning they haven’t made a payment in over 9 months), it turns out that a majority of student loan borrowers are on the brink.

Reports say that another 4 million borrowers are 91 to 180 days late on their payments.

Most staggering?

The Education Department says that less than 40% of all borrowers are totally up to date on their student loans.

READ MORE: Why Has This Pennsylvania Town Been Burning for 60 Years?

If you are in default on a student loan, by the way, programs do exist to help get your student loan back on track.

Experts say you should contact your lender and ask how to enroll into a loan rehabilitation program. You can click here to learn more.