Department of Education resumes collections for defaulted student loans

In the United States, the Department of Education began resuming its collections for defaulted federal student loans on May 5, 2025, after a pause of more than five years due to pandemic relief measures. The Education Department's announcement highlighted concerns over taxpayer burden, stating that failure to repay loans by borrowers results in financial costs being transferred to taxpayers. With over 42.7 million borrowers owing more than $1.6 trillion in student debt, the department warned that up to 10 million borrowers could find themselves in default soon. As the collections process resumes, borrowers who have defaulted will receive email notifications encouraging them to contact the Default Resolution Group. They will be advised to make monthly payments, enroll in income-driven repayment plans, or pursue loan rehabilitation options. Lack of action may lead to dire consequences including wage garnishment or the withholding of federal benefits such as tax refunds and social security checks. Educational authorities stress the urgency for borrowers to act before falling further into default. The shift back to collections raises concerns for many Americans, particularly those who have been in forbearance during the economic disruptions caused by the pandemic. Borrowers face a significant financial burden, exacerbated by rising living costs and a challenging job market. The Secretary of Education, Linda McMahon, emphasized that debt burdens need repayment, framing it as a responsibility that borrowers must uphold to prevent further strain on taxpayers and essential public services. Critics of the resumption of collections argue that many borrowers lack the ability to start making payments again, given their financial situations worsened by the pandemic. As millions transition back to repayment, the Education Department has prepared resources and contact points for borrowers seeking assistance. However, the complexities of student loan management can lead to confusion, with many reporting difficulty obtaining information and support regarding their repayment options. The return to collections remains a contentious topic, highlighting widespread anxieties surrounding student debt in America.