Department of Education to collect student loan payments next month

(CBS, KYMA/KECY) - The Department of Education says starting May 5, it will begin collecting student loan payments that are in default.

According to the department, more than five million borrowers are in default and four million more could be in the same position in a few months.

For those who are behind on their payments, this could mean wage garnishment or money withheld from tax refunds and social security benefits.

On CBS Mornings, CBS News Business Analyst Jill Schlesinger says those borrowers need to pay attention.

"All of the people now in default we are now seeing reporting to credit agencies. We haven't seen that before. So, we now know that credit scores are dropping for these borrowers by somewhere around 130 points," Schlesinger explained.

The department says less than 40% of borrowers are current on their student loan payments.