The Education Department will resume collecting federal student loans in default next month after a five-year hiatus that began at the start of the coronavirus pandemic in March 2020.
“Resuming collections protects taxpayers from shouldering the cost of federal student loans that borrowers willingly undertook to finance their postsecondary education,” the department said in a news release. “This initiative will be paired with a comprehensive communications and outreach campaign to ensure borrowers understand how to return to repayment or get out of default.”
Collections will resume on Monday, May 5, years after Congress said borrowers should begin to repay their loans.
“While Congress mandated that student and parent borrowers begin to repay their student loans in October 2023, the Biden-Harris Administration refused to lift the collections pause and kept borrowers in a confusing limbo,” the statement continued. “The previous Administration failed to process applications for borrowers who applied for income-driven repayment and continued to push misguided “on-ramps” and illegal loan forgiveness schemes to win points with borrowers and mask rising delinquency and default rates.”
- Today, 42.7 million borrowers owe more than $1.6 trillion in student debt.
- More than 5 million borrowers have not made a monthly payment in over 360 days and sit in default—many for more than 7 years—and 4 million borrowers are in late-stage delinquency (91-180 days). As a result, there could be almost 10 million borrowers in default in a few months. When this happens, almost 25 percent of the federal student loan portfolio will be in default.
- Only 38 percent of borrowers are in repayment and current on their student loans. Most of the remaining borrowers are either delinquent on their payments, in an interest-free forbearance, or in an interest-free deferment. A small percentage of borrowers are in a 6-month grace period or in-school.
- Currently, almost 1.9 million borrowers have been unable to even begin repayment because of a processing pause put in place by the previous administration. Since August 2024, the Department has not processed applications for enrollment in any repayment plan such as Income-Based Repayment, Income-Contingent Repayment, or PAYE. The Department is currently working with its federal student loan servicers and anticipates processing to begin next month. (Department of Education)
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Rather than have the backs of American taxpayers, the Biden administration “put them on the hook for irresponsible lending,” and Education Secretary Linda McMahon said that ends now.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” she said in a statement. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear. Hundreds of billions have already been transferred to taxpayers. Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment—both for the sake of their own financial health and our nation’s economic outlook.”
On May 5, @usedgov will resume collections for student loans in default.
— Secretary Linda McMahon (@EDSecMcMahon) April 23, 2025
We will not allow taxpayers to take on debts that are not their own.
Please visit https://t.co/jzxyqF5Ikn to learn more about repayment options. pic.twitter.com/MdGoVd2HsS
The Education Department said its Office of Federal Student Aid will enlist its partners to help "restore commonsense and fairness" so borrowers repay the loans they willingly undertook, not taxpayers.
"There will not be any mass loan forgiveness," the department stated.
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