Department of Education Resumes Federal Student Loan Collections Nationwide

The U.S. Department of Education has resumed collections on defaulted federal student loans after a multi-year pause that began in March 2020, impacting millions of borrowers nationwide. With over 5 million borrowers already in default and another 4 million at least 90 days late on payments, many Americans now face renewed risks of wage and benefit garnishment, including potential offsets to federal and state benefits and even Social Security income. These collection efforts are part of a broader policy shift that could reverse some of the leniency introduced under the previous administration, raising concerns about an uptick in defaults. Borrowers are advised to confirm their loan status through their servicer or the Federal Student Aid website and consider options like loan rehabilitation, consolidation, or income-driven repayment plans to avoid or escape default. Experts stress the urgency of taking action, as wage garnishments could begin as early as this summer. The Department of Education directs those in default to its default resolution group for guidance on available relief options.