The Department of Education (ED) Monday announced it will begin involuntary collection efforts for student loans after a five year pause.
A senior department official told the Daily Caller News Foundation the effort is aimed at removing the burden from taxpayers since involuntary collections were put on pause during the pandemic in March 2020 and never resumed under the Biden administration. ED will begin referring defaulted student loans to collections starting May 5 through the treasury offset program.
“The federal government student loan portfolio has continued to grow and we’ve got a record amount of our borrowers that are at risk of or in delinquency and default,” a senior ED official told the DCNF. “The federal student loan portfolio is headed towards a fiscal cliff if we don’t start repayment and collections.” (RELATED: Student Loan Borrowers Bailed Out By Biden Now Piling Up Mounds Of Other Debt)
Only one in four borrowers are current on their student loans and as many as 4,000,000 borrowers are in late-stage delinquency of between 91 and 180 days, a department official informed the DCNF. About 35% of the federal student loan portfolio are 60 days delinquent and 5.3% have been in default for more than seven years.
President Donald Trump speaks alongside entertainer Kid Rock before signing an executive order in the Oval Office of the White House on March 31, 2025 in Washington, DC. (Photo by Andrew Harnik/Getty Images)
“The current administration believes that American taxpayers can no longer serve as collateral for student loans. Student loan debt must be paid back,” the official said.
After a 30-day notice, the department will begin an administrative wage garnishment for unpaid loans beginning in the summer.
The department plans on kickstarting a “significant outreach effort to make borrowers aware of the obligations they have” as well as notifying them of the programs available for repayment, such as the income-driven repayment.
“We wholly believe that Congress has a role to play in fixing the higher education system that puts students in a position where they can afford their loan payments,” the department official told the DCNF. “So we’re looking forward to working with Congress on their efforts to streamline loan repayments as well as lowering college costs.”
Student loan repayments were temporarily paused during the height of the COVID-19 pandemic during the first Trump administration but the pause was continuously extended since. Former President Joe Biden attempted several times to forgive student loan debt, though many efforts were ruled unconstitutional.
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