Student loans in default to be referred to debt collection, Education Department says

Source: Associated Press

WASHINGTON (AP) — The Education Department will begin collection next month on student loans that are in default, including the garnishing of wages for potentially millions of borrowers, officials said Monday.

Currently, roughly 5.3 million borrowers are in default on their federal student loans.

The Trump administration ’s announcement marks an end to a period of leniency that began during the COVID-19 pandemic. No federal student loans have been referred for collection since March 2020, including those in default. Under President Joe Biden, the Education Department tried multiple times to give broad forgiveness of student loans, only to be stopped by courts.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said.

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By ANNIE MA
Updated 6:58 PM EDT, April 21, 2025


Read more: https://apnews.com/article/student-loan-debt-default-collection-fa6498bf519e0d50f2cd80166faef32a

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Source: NBC News

Involuntary collection of defaulted student loans to resume, Education Department says

April 21, 2025, 4:44 PM EDT
By Dennis Romero

The U.S. Department of Education on Monday said it's restarting "involuntary" repayment of federal student loans that are in default.

The payments were paused during the first term of President Donald Trump in 2020 as a response to the Covid pandemic.

"Beginning May 5, the department will begin involuntary collection through the Treasury Department’s offset program, which withholds payments from the government — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government," the department said in a statement.

Wages will be garnished following a 30-day warning, it added.

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Read more: https://www.nbcnews.com/news/us-news/involuntary-collection-defaulted-student-loans-resume-education-depart-rcna202270