The headquarters of the Department of Education on March 12, 2025 in Washington, DC.
Win McNamee | Getty Images
The U.S. Department of Education announced Monday that its Office of Federal Student Aid will resume “involuntary collections” on May 5 for federal student loans that are in default.
Collections will be made through the so-called Treasury Offset Program, which can reduce or withhold payments from the government — such as tax refunds, Social Security benefits, federal salaries and other benefits paid through a federal agency — to satisfy a past-due debt to the government.
“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. “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.”
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The Department has not collected on defaulted student loans since March 2020. After the Covid pandemic-era pause on federal student loan payments expired in September 2023, the Biden administration offered borrowers another year in which they would be shielded from the impacts of missed payments.
More than 5 million borrowers are currently in default, according to the Education Department, with another 4 million borrowers in “late-stage delinquency,” or over 90 days past-due on payments.
All borrowers in default will be notified via email by Office of Federal Student Aid in the next two weeks, the Department said. These borrowers can contact the government’s Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
Borrowers who remain in default will be subject to “involuntary collections” and may eventually face administrative wage garnishment, the Education Department said.
“Borrowers who graduated during the pandemic may have no experience with loan repayment, so it is important to educate them about the process, including their rights and responsibilities,” said Higher education expert Mark Kantrowitz.
“Payment is due even if you are dissatisfied with the quality of the education you received,” he said.