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The Department of Education announced 5 million Americans with defaulted student loan payments will have their loans sent for collections on May 5.

 

Next month, for the first time since student loan payments were paused due to the onset of the COVID-19 pandemic, the Education Department will collect the debts from borrowers who had defaulted. Which means they hadn’t paid their debts for around nine months or 270 days before the pandemic.

 

A defaulted loan is a loan that a borrower hasn't made payments for 270 days, according to the office of federal student aid. When the loan officially enters default, it becomes eligible for mandatory collections.

 

•    Collections on defaulted loans are resuming: After a long pause, the U.S. Department of Education is restarting collections for borrowers who defaulted on their federal student loans. This includes actions like wage garnishment and seizing tax refunds. 

•    May 5, 2025: Treasury Offset Program resumes, impacting those in default.