FEDERAL student loan collections will resume this month.
Over 5 million borrowers will be affected by the student loan repayments.
GettyStudent loan borrowers who had protections under the Biden administration may see those protections rolled back[/caption]The federal government will resume involuntary collections on student loans starting May 5.
This ends a years-long pause that has protected defaulted borrowers from some of the harshest financial consequences.
Linda McMahon, secretary of the US Department of Education, announced the move on April 21.
The announcement signaled that borrowers who have missed payments for 270 days or more could soon see their wages, tax refunds, and even Social Security benefits garnished.
The shift marks the final phase of the student loan system’s return to pre-pandemic operations.
Collections have been on hold since March 2020, when the Covid-19 pandemic prompted sweeping relief for borrowers.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” McMahon said in a statement.
Over 5 million borrowers are currently in default and could be impacted by the resumed collections.
The Biden administration restarted monthly student loan payments in fall 2023, but it had delayed collections for those in default.
That delay extended even beyond the 2024 presidential election, despite mounting legal and political pressure.
McMahon accused the Biden administration of misleading borrowers and pledged to “shepherd the student loan program responsibly.”
Borrower advocates were quick to condemn the change.
Mike Pierce, executive director of the Student Borrower Protection Center, criticized the timing and intent of the policy.
“Since February, Donald Trump and Linda McMahon have blocked these borrowers’ path out of default and are now feeding them into the maw of the government debt collection machine,” Pierce said.
“This is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country.”
According to the Education Department, just 38% of borrowers are current on their loans, and more than 40 million people still owe federal student loan debt.
Another 2 million borrowers are in interest-free forbearance while courts decide the fate of the Biden administration’s SAVE plan.
The plan bases monthly payments on income and was billed as the “most affordable repayment plan ever.”
However, many of these affordable options have been paused or jeopardized by litigation since Trump returned to office.
All defaulted borrowers will receive email notices over the next two weeks.
The messages will outline their options, which include resuming payments, enrolling in an income-driven repayment plan, or pursuing loan rehabilitation or consolidation.
Borrowers who take action may be able to avoid wage garnishment and other penalties.
But for millions of Americans already struggling with debt and inflation, the restart of collections could add new financial strain.
With the presidential election looming and legal battles ongoing, the future of student loan relief remains uncertain.
For now, though, the collections machine is set to start again—this time with real consequences for borrowers in default.
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