The era of student loan leniency ushered in during the COVID-19 pandemic is officially coming to a close. The U.S. Department of Education has announced that on May 5, 2025, it will resume collections on defaulted federal student loans, ending a more than five-year pause that began in March 2020.
This move affects more than 5 million borrowers currently in default and signals a broader shift in federal policy from pandemic-era forbearance to renewed fiscal enforcement. The Biden-Harris Administration had extended the collections freeze even after payments resumed in October 2023, leaving many borrowers in limbo. That window has now closed.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” stated Secretary of Education Linda McMahon. “The executive branch cannot simply erase debt—it must uphold the law and promote financial accountability.”
As of today, the numbers are staggering: more than 42 million Americans owe over $1.6 trillion in student loans. Of those, nearly 10 million borrowers are either in default or on the verge of it. Only 38% of borrowers are current on their loans, while others remain in deferment, forbearance, or delinquency.
The Department of Education will now restart key collection mechanisms such as the Treasury Offset Program—allowing federal tax refunds and Social Security benefits to be withheld—and wage garnishments, which are expected to begin later this summer. Guaranty agencies may also resume involuntary collections under the Federal Family Education Loan Program.
To help borrowers transition back into repayment, the Department is launching a national communications campaign. Borrowers will receive outreach via email and social media, with resources including a new AI assistant (“Aiden”), the Loan Simulator tool, and extended call center hours. Importantly, borrowers in default are encouraged to explore options such as loan rehabilitation or enrollment in an Income-Driven Repayment (IDR) plan.
Due to a processing backlog caused by administrative delays, nearly 1.9 million borrowers have been unable to access or adjust repayment plans since August 2024. The Department has promised to begin processing IDR applications next month, alongside improvements like simplified enrollment and removal of annual income recertifications.
As the government shifts from relief to repayment enforcement, the message is clear: student loan debt will not be wiped away through executive action, and borrowers must prepare to meet their obligations. For help navigating repayment or getting out of default, borrowers should visit StudentAid.gov/end-default.
This is a pivotal moment for federal student loan holders. Those who act now can regain control of their financial future—before collections begin.