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4d ago

Federal Student Loan Collections to Resume May 5 After Five-Year Pause

Millions of borrowers in default or delinquency face garnishments as Education Department launches outreach campaign and rejects mass forgiveness.

A sticker shows that the American Express credit card is accepted at the front of a business on February 11, 2025 in Chicago, Illinois.
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Overview

  • The U.S. Department of Education will restart collections on defaulted federal student loans on May 5, 2025, ending a five-year moratorium initiated during the COVID-19 pandemic.
  • Nearly 9 million borrowers in default or late-stage delinquency could face wage, tax refund, and Social Security garnishments as part of the Treasury Offset Program.
  • Education Secretary Linda McMahon emphasized the move as a measure to protect taxpayers and rejected any plans for broad student debt forgiveness.
  • The department is providing resources for borrowers, including extended Federal Student Aid office hours, an AI assistant, and targeted outreach to help borrowers manage repayment options or rehabilitate loans.
  • Women, who hold nearly two-thirds of the nation’s $1.6 trillion student debt, are expected to be disproportionately impacted by the return of collections.