The U.S. Department of Education announced it will resume involuntary collections on defaulted federal student loans starting May 5, 2025, ending a pause initiated during the COVID-19 pandemic in March 2020. This move affects over 5 million borrowers currently in default and an additional 4 million who are severely delinquent.
Education Secretary Linda McMahon stated that the Biden administration’s previous attempts at broad student debt forgiveness lacked constitutional authority and misled borrowers. She emphasized that “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.”
The Department plans to implement wage garnishments and seize federal benefits, such as tax refunds and Social Security payments, through the Treasury Offset Program. Borrowers in default will receive notices in the coming weeks, with wage garnishment processes expected to begin by summer.
Critics, including the Student Borrower Protection Center, have raised concerns about the resumption of collections amid ongoing economic challenges. They argue that the move could disproportionately impact vulnerable populations, including seniors and individuals with disabilities who rely on Social Security benefits.
The Department is encouraging affected borrowers to explore options such as income-driven repayment plans and loan rehabilitation programs to avoid garnishment. Efforts include a communication campaign to inform borrowers and assist them in navigating the repayment process.
