The Blubber

The Education Department will resume collection efforts next month on student loans in default, including wage garnishment for potentially millions of borrowers, officials announced Monday.

Currently, approximately 5.3 million borrowers have defaulted on their federal student loans.

The Trump administration’s move signals the end of a period of leniency that began at the onset of the COVID-19 pandemic. Since March 2020, no federal student loans — including those in default — have been referred for collection.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said.

Starting May 5, the department will initiate involuntary collection through the Treasury Department’s offset program, which allows the government to withhold funds such as tax refunds, federal wages, and other benefits from individuals with overdue federal debts. After providing a 30-day notice, the department will also begin garnishing wages for defaulted borrowers.

Many borrowers have already been preparing for repayment deadlines.

In 2020, then-President Donald Trump suspended federal student loan payments and halted interest accrual to provide temporary relief. That pause was extended multiple times through 2023. A final grace period ended in October 2024, requiring tens of millions of Americans to resume payments.

Borrowers who fail to make payments for nine months are classified as in default, which negatively affects their credit and opens them up to collections.

Beyond those already in default, around 4 million more borrowers are currently 91 to 180 days behind on their payments. According to department officials, fewer than 40% of all federal student loan borrowers are up to date on their obligations.

While President Joe Biden’s administration canceled student debt for over 5 million borrowers through expanded forgiveness programs, the Supreme Court struck down his broader proposal for widespread relief. Even so, more than $183.6 billion in student loans were ultimately forgiven.