Student Loan Collections Resume After Five-Year Pause

The U.S. Department of Education has resumed collections on defaulted federal student loans after a five-year pandemic pause, affecting more than 5 million borrowers who have not made payments for at least nine months. The government is now withholding tax refunds, wages, and federal benefits from those in default. Borrowers are encouraged to contact the Default Resolution Group to explore relief options such as loan rehabilitation or consolidation. Critics, including advocacy groups and state officials, argue that resuming collections at this time follows blocked debt relief efforts under the Biden administration and new proposals to cut federal student aid, raising concerns about increased economic hardship for struggling Americans. Some experts warn that the number of borrowers in default could double, potentially worsening financial stability for many families. Borrowers are advised to review their loan status and seek assistance promptly to avoid harsher penalties.