Education Department to Restart Debt Collection on Defaulted Student Loans
Katherine Knott
April 21, 2025
About 25 percent of all borrowers have or will default on their student loans in the next few months, and another 35 percent are at least 60 days past due.
The Education Department will resume collecting on defaulted student loans early next month, restarting a system that’s been on hold since spring 2020, the agency announced Monday.
Starting May 5, the department will withhold tax refunds or benefits such as Social Security from borrowers who are in default. Later this summer, the department will begin garnishing the wages of defaulted borrowers, a move consumer protection advocates have criticized as out of control.
About 38 percent of the nearly 43 million student loan borrowers are current on their payments, and a record number of borrowers are at risk of or in delinquency and default, the department said Monday. Borrowers default when they miss at least 270 days of payments.
