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The Trump administration on Monday has said that it will resume collecting defaulted student loans stating that "there will not be any mass loan forgiveness." It’s expected to affect the more than 5 million borrowers who are in default. The Department of Education stated in a release that it has not collected on defaulted loans since March 2020. The Education Department urged student borrowers in default to contact the student aid office’s Default Resolution Group and make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
"American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies," said US Secretary of Education Linda McMahon in a statement.
The Education Department in its release also said, "The previous Administration failed to process applications for borrowers who applied for income-driven repayment and continued to push misguided “on-ramps” and illegal loan forgiveness schemes to win points with borrowers and mask rising delinquency and default rates."
Starting today, May 5, the Department is resuming collections to protect taxpayers from shouldering the cost of student loans. Federal student loans are financed by the American people and must be paid back. https://t.co/yQmP12Tojy pic.twitter.com/BIlSBPLHhB
— U.S. Department of Education (@usedgov) May 5, 2025
As part of its move to resume collection of these debts, the government has restarted the Treasury Offset Program, which collects debts by garnishing federal and state payments, such as tax returns or social security benefits.
"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," it added.
This comes as the Trump administration attempts to roll back former President Joe Biden’s policies, including those around student loan forgiveness.
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Who will be affected by student loan collections?
Federal student loans go into default after 270 days without payment.
When a student loan goes in default, it is reflected on the credit report, as per CNN. A student can check on the status of loan by reaching out to student loan servicer or visiting the Federal Student Aid website for more information.
According to the Department of Education’s website, student can no longer receive deferment or forbearance, which allows them to temporarily stop making payments on your loan.