Defaulted Student Loans Sent to Collections May 5

The U.S. Department of Education announced it will resume collections on defaulted federal student loans starting May 5, ending the leniency period that began during the COVID-19 pandemic. This move affects approximately 5.3 million borrowers currently in default, with collection efforts to include wage garnishment, tax refund offsets, and withholding of federal benefits. While the Trump administration initially paused collections in 2020, and the Biden administration extended the pause and attempted loan forgiveness, court decisions blocked broad debt relief. Critics argue that resuming collections will further burden struggling families, while officials assert it restores fiscal responsibility. Borrowers not yet in default still have options such as income-driven repayment plans, deferment, and forbearance, but those in default face more severe consequences unless they pursue rehabilitation or consolidation. Advocacy groups and financial advisors urge affected borrowers to contact their loan servicers promptly to explore available remedies.