After a three-year pause, the Department of Education is set to resume collecting on defaulted federal student loans. This marks the first time collections have restarted since 2020, when the COVID-19 pandemic prompted a temporary suspension of payments and interest accrual. Trump administration officials have expressed concern that the federal student loan portfolio faces significant financial challenges if repayments and collections do not resume.
Restarting collections aims to stabilize the loan program and ensure its long-term sustainability. The Department of Education is expected to provide resources and guidance to borrowers as they navigate the repayment process. Borrowers are encouraged to explore available repayment options, including income-driven repayment plans, which can adjust monthly payments based on income and family size. Experts advise borrowers to contact their loan servicers to discuss their individual circumstances and determine the best repayment strategy.
Student Loan Repayments to Restart After 3-Year Pause
The Department of Education will resume collecting on defaulted federal student loans, ending a pause that began in 2020. Officials cite concerns about the long-term financial health of the student loan program as the reason for restarting collections. Borrowers who have defaulted on their loans will need to begin making payments again. The department is expected to release further details on repayment options and resources for borrowers.