Student Loan Collections to Resume for Defaulted Borrowers in May
The U.S. Department of Education will resume collections on defaulted federal student loans starting May 5, 2025, ending a pause that began in March 2020. This action is intended to protect taxpayers from bearing the cost of unpaid loans and will be accompanied by an outreach campaign to help borrowers return to repayment or resolve their default status.
With over 42.7 million borrowers owing more than $1.6 trillion in student debt, the Department aims to reduce the number of borrowers in default—currently over 5 million—and prevent further delinquencies. The restart of collections will include measures such as wage garnishment and tax refund seizures for borrowers in default.
To help, borrowers will be encouraged to explore repayment options, including income-driven repayment plans or loan rehabilitation. The Department will also introduce resources like the Loan Simulator and AI Assistant (Aiden) to assist borrowers in selecting the right plan.
This initiative, part of a broader effort to restore fairness to the student loan system, emphasizes that borrowers—not taxpayers—must repay their loans. The Department’s communications campaign will ensure that borrowers understand their options and avoid default.
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