Trump admin to start collecting debts on student loans considered to be in default

The DOE's Federal Student Aid office will begin collecting the debts on May 5, which could include taking the money out of payments that borrowers receive from the federal government, such as money from tax refunds, federal salaries and other benefits.

Published: April 21, 2025 6:00pm

The Department of Education (DOE) on Monday announced the federal government will begin collecting outstanding student loan debts that are in default next month.

The move will mark an end to the COVID-19 pandemic's period of leniency, which started under President Donald Trump in 2020. No federal student loans have been referred for collection since March 2020. The order is expected to impact roughly 5.3 million borrowers who are already in default. 

The DOE's Federal Student Aid office will begin collecting the debts on May 5, which could include taking the money out of payments that borrowers receive from the federal government, such as money from tax refunds, federal salaries and other benefits. 

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

Student loan payments restarted last October, after the last of the Biden administration pause extensions lapsed, and more than four million borrowers are already 91 to 180 days late on their loan payments. Borrowers who are nine months behind on their payments go into default.

Misty Severi is a news reporter for Just the News. You can follow her on X for more coverage. 

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