Context:

The Trump administration has resumed collections on defaulted student loans after a five-year hiatus, impacting millions of borrowers. The Department of Education is now notifying defaulters, urging them to make payments or enroll in repayment plans to avoid further collection actions. Approximately 42.7 million Americans collectively owe $1.6 trillion in student loans, with over 5 million having missed payments in the past year. Involuntary collections will be enforced by the Treasury Department, which includes garnishing wages, tax refunds, and federal benefits. The initial pause on collections began in March 2020 under Trump due to the pandemic, and was extended under Biden to offer financial relief to students facing rising college costs.

Dive Deeper:

• The Trump administration has reinstated the collection of defaulted student loans as of May 5, 2025, ending a five-year break initiated during the pandemic to ease financial burdens on borrowers.

• The Department of Education states that over 5 million borrowers have not made a payment in the last year, and an additional 4 million are at risk of default, contributing to the $1.6 trillion owed by 42.7 million borrowers nationwide.

• U.S. Secretary of Education Linda McMahon emphasized that taxpayers should not bear the burden of unpaid student loans, while press secretary Karoline Leavitt highlighted the government's commitment to ensuring loans are repaid.

• Borrowers in default have been notified via email to either make a payment or enroll in a repayment plan, with a referral to the Treasury Department for collections if they fail to comply by the set deadline.

• Involuntary collection methods include garnishing wages, intercepting tax refunds, and withholding portions of federal pensions and Social Security checks to recover defaulted loan amounts.

• The pause on collections was initially set by the Trump administration in March 2020 due to the pandemic, offering relief as education costs continued to rise, and was extended by the Biden administration.

• The announcement has reignited discussions on student loan policies and the broader implications for borrowers and taxpayers amid ongoing economic challenges.

• Donald Trump‘s administration is kicking off collection of defaulted student loans as of Monday (May 5).

• After a five-year hiatus, the U.S. Department of Education will resume collections of defaulted student loans this week, via NPR.

• There are more than 42.7 million student loan borrowers in the United States, who owe a collective $1.6 trillion.

• Keep reading to find out more…

• The Department of Education says that more than 5 million have not made a payment in the past year, and that number is expected to grow as an additional 4 million borrowers are approaching default status.

• “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” U.S. Secretary of Education Linda McMahon said in a statement.

• “Debt cannot be wiped away. It just ends up getting transferred to others,” press secretary Karoline Leavitt also told reporters. “The government can and will collect defaulted federal student loan debt by withholding money from borrowers, tax refunds, federal pensions and even their wages. … If you take out a loan, you have to pay it back.”

• The Education Department announced in April that it would begin notifying borrowers who are in default via email, urging them to make a payment or to enroll in a repayment plan, and referring them to this government website with information about how to do so.

• The Department said it would begin referring borrowers who remain in default to a collections program run by the Treasury Department by May 5. It also said in its notice that it will begin the process of garnishing wages, meaning that payments would be automatically deducted from borrowers’ paychecks, later this summer.

• Borrowers can also check the status of their loan at studentaid.gov.

• Payments were initially paused by the first Trump administration in March 2020 due to the pandemic. The Biden administration then extended the pause, giving students relief from the rising costs of college.

• Find out which major retailer is no longer shipping items to the United States from China amid the Trump tariffs.