The U.S. Department of Education will restart involuntary collection measures on defaulted federal student loans on May 5, affecting at least five million borrowers and ending a five-year pause that began during the pandemic, the department announced Monday.
In a release, the department cast the move as one that would protect “responsible taxpayers” from shouldering the burden of borrowers who took out loans. Student loans go into default after 270 days without a payment, and the department said only 38% of borrowers were in repayment and current on their student loans.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said U.S. Education Secretary Linda McMahon.
The United States has not collected on defaulted student loans since March 2020, when the first Trump administration paused repayments due to the developing COVID-19 pandemic. The pause was extended several times, including by the Biden administration, with the most recent pause ending in October.
Former President Joe Biden’s efforts to wipe out student loan debt for tens of millions of borrowers were repeatedly rejected by courts, including a 2023 ruling by the Supreme Court. However, the Biden administration erased student loan debt for more than five million people through other means.
More than five million borrowers are in default, a number that could grow to 10 million in a few months, the department said, alleging a predicted quarter of the federal student loan portfolio will be in default, and McMahon took aim at Biden for “pushing the federal student loan portfolio toward a fiscal cliff.”
“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,” McMahon said. “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.”
More than 42.7 million borrowers owe more than $1.6 trillion in student debt, the department said, adding there would not be any mass loan forgiveness. They said all borrowers in default would receive emails within the next two weeks from the Office of Federal Student Aid (FSA) notifying them of the new situation, and will send required notices beginning the debt collection process during the summer.
The FSA will enlist states, universities, financial aid administrators, third-party servicers and other stakeholders to ensure loan repayment. Over the next two months, the FSA will undertake an outreach campaign to borrowers reminding them of their obligations and provide resources and support, the department said.
Gavin Escott is the campus news editor for the Daily Cardinal. He has covered protests, breaking news and written in-depth on Wisconsin politics and higher education. He is the former producer of the Cardinal Call podcast. Follow him on X at @gav_escott.
