Student loan repayments are set to resume for many borrowers on May 5, 2025, after a pause that began in March 2020.

Approximately 4 million borrowers are currently in late-stage delinquency, having missed payments for 91 to 180 days, which raises concerns about severe consequences such as wage garnishment and tax refund interception.

This policy shift comes amid economic uncertainty, with rising costs of living and inflation impacting consumer confidence.

Concerns have been raised about the value of certain college programs in the job market, prompting calls for accountability from both borrowers and educational institutions.

Critics argue that the decision to resume collections could exacerbate financial hardships for working families already struggling with debt.

The Biden administration previously attempted to provide relief through proposals to forgive up to $20,000 in debt, but these faced legal challenges.

An enhanced income-driven repayment process will be launched, simplifying enrollment and eliminating annual income recertification, although mass loan forgiveness is not expected.

High living expenses in cities like New York and Honolulu add to the financial burden on students, complicating their ability to repay loans.

Financial counselors emphasize that rising living costs and stagnant wages complicate borrowers' abilities to manage repayments after a five-year pause.

Many borrowers express feelings of being trapped in debt, describing their situation as a 'financial prison'.

Surveys indicate that a significant percentage of families view student loan debt as a major barrier to attending college.

Borrowers can lower their monthly payments by adjusting contributions to retirement accounts and utilizing tax strategies to reduce their adjusted gross income.