The U.S. Education Department announced it will resume involuntary collections on defaulted federal student loans beginning May 5, ending a five-year pause that began during the COVID-19 pandemic.
The move means borrowers in default may soon face wage garnishment, tax refund seizures, and federal benefit reductions. Borrowers affected will receive official notices within two weeks, with wage garnishment set to resume after a 30-day warning period.
According to federal data, over 5 million Americans are currently in default on their student loans, with an additional 4 million behind on payments. In total, around 38 million people hold federal student debt, though only about one-third are actively making payments.
This marks a shift in policy as the federal government winds down pandemic-era relief programs and takes steps to normalize the student loan system. The department has emphasized that those impacted should explore available repayment options, including income-driven plans and potential forgiveness programs.
The announcement comes amid a broader national conversation on student debt reform and rising college tuition costs. Advocates have raised concerns about the burden of aggressive collections on low-income borrowers, while the administration maintains that it is working to balance fiscal responsibility with borrower support.
In a separate development, Harvard University filed a lawsuit against the federal government after it withheld more than $2.2 billion in grants and $60 million in contracts. The move is reportedly aimed at pressuring the university into compliance with a set of disputed policy reforms.
Borrowers seeking more information about repayment options can visit StudentAid.gov for guidance and resources.
Source: US Dept of Education