The U.S. Department of Education announced this week that its Office of Federal Student Aid (FSA) will resume collections on defaulted federal student loans beginning Monday, May 5, 2025, ending a pause that has been in effect since March 2020.
The announcement comes amid growing concerns about the federal student loan portfolio, which currently includes 42.7 million borrowers owing more than $1.6 trillion. According to the Department, only 38 percent of borrowers are current on their payments, while nearly 10 million borrowers are either in default or late-stage delinquency.
"American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies," said U.S. Secretary of Education Linda McMahon in the announcement. She criticized the previous administration for misleading borrowers and attempting to implement "illegal loan forgiveness schemes."
But millions of Americans were hoping for student debt relief, as outlined in the forthcoming book The Student Debt Crisis: America's Moral Urgency written by Dr. Jamal Watson, a Diverse editor and professor and associate dean of graduate studies at Trinity Washington University. The book is scheduled to be released in September 2025.
The Department will restart the Treasury Offset Program next week and plans to begin administrative wage garnishment later this summer. Defaulted borrowers will receive email communications over the next two weeks urging them to contact the Default Resolution Group to make arrangements for repayment.
The Department also announced plans to launch an enhanced Income-Driven Repayment process that will simplify enrollment and eliminate annual income recertification requirements. Additionally, nearly 1.9 million borrowers whose applications have been on hold since August 2024 should see processing begin next month.
FSA plans to conduct a communications campaign over the next two months, reminding borrowers of their repayment obligations and highlighting available resources, including a new Loan Simulator and AI Assistant. The Department emphasized that "there will not be any mass loan forgiveness" and that student and parent borrowers—not taxpayers—must repay their loans.
For borrowers seeking to get out of default, detailed information is available at StudentAid.gov/end-default.
