Education Department to resume ‘involuntary collections’ of defaulted student loans

The Department of Education headquarters in Washington, DC, was photographed on March 12, 2025.

The U.S. Department of Education made an announcement on Monday that its Office of Federal Student Aid will restart the process of collecting federal student loans in default on May 5. This collection will be done through the Treasury Offset Program, which can withhold payments from the government, such as tax refunds, Social Security benefits, federal salaries, and other benefits, to settle overdue debts to the government.

U.S. Secretary of Education Linda McMahon stated, “American taxpayers will no longer be used as collateral for irresponsible student loan policies. The Biden Administration misled borrowers by claiming the authority to erase debts, as loan balances do not simply vanish.”

The Department had ceased collecting on defaulted student loans since March 2020. Following the expiration of the Covid Pandemic-related pause on federal student loan payments in September 2023, the Biden administration granted borrowers an additional year of protection from the consequences of missed payments.

According to the Education Department, there are currently over 5 million borrowers in default and an additional 4 million borrowers in late-stage delinquency, over 90 days past-due on payments.

The Department will contact all borrowers in default via email within the next two weeks. Borrowers can reach out to the government’s Default Resolution Group to set up monthly payments, enroll in an income-driven repayment plan, or opt for loan rehabilitation. Those who persist in default will face involuntary collections and potential administrative wage garnishment, as per the Education Department.

Higher education expert Mark Kantrowitz emphasized the importance of educating borrowers, especially those who graduated during the pandemic, about the loan repayment process, including their obligations and rights. He noted that payment is obligatory even if borrowers are dissatisfied with the quality of the education they received.