Since the onset of the COVID-19 pandemic, federal student loan borrowers in default have been shielded from aggressive collection efforts—but that protection is about to end. Education Secretary Linda McMahon announced that the U.S. Department of Education will restart involuntary collections on May 5 for borrowers who haven’t made payments in at least 270 days.
This means the government will once again begin garnishing wages and seizing federal benefits like tax refunds and Social Security to recover unpaid loans. The move marks the final major step in reactivating the student loan repayment system that was largely frozen in March 2020.
Although monthly loan payments resumed under President Biden in fall 2023, involuntary collections remained on hold—until now.
McMahon’s announcement, made on April 21, comes amid ongoing legal battles over repayment plans like the Biden-era SAVE program, which remains under judicial review.
Currently, only 38% of federal borrowers are actively repaying their loans, while over five million are in default. About two million remain in interest-free forbearance as courts determine the fate of income-driven repayment plans.
In her statement, McMahon criticized previous policies, vowing to manage the program “responsibly” and saying taxpayers should not be “collateral for irresponsible student loan policies.”
Borrower advocates sharply criticized the decision. Mike Pierce of the Student Borrower Protection Center argued that legal challenges and policy shifts have limited options for struggling borrowers. He called the restart of collections “cruel and unnecessary,” warning it could worsen financial strain for many families.
The Department of Education said all defaulted borrowers will receive notification by email within two weeks, encouraging them to take action—either by repaying, consolidating, or enrolling in income-driven repayment or rehabilitation programs.
