U.S. Begins Collections for 5 Million Defaulted Student Loans

The Department of Education, under the Trump administration, has resumed collections on federal student loans in default after a five-year pause, affecting over five million borrowers. Those in default will begin receiving notices, and collection measures, including wage garnishment and seizure of tax refunds and federal benefits, will commence through the Treasury Offset Program. The policy marks a shift from the prior leniency instituted during the pandemic and continued under the Biden administration, which had paused such collections and attempted broader loan forgiveness. Education Secretary Linda McMahon stated the move is intended to protect taxpayers from shouldering the cost of unpaid loans. Advocates and critics warn the restart could cause financial distress for borrowers and potentially increase bankruptcy filings, as those affected may seek legal protection from aggressive collection efforts. Borrowers are advised to contact the Default Resolution Group for repayment options or loan rehabilitation.