Student Loan Collections to Resume for Millions in Default, Including Wage Garnishment

Posted on April 22, 2025

Federal student loan collections are set to resume next month for the first time since 2020, with the U.S. Department of Education confirming plans to begin garnishing wages and withholding tax refunds from borrowers in default.

The announcement, made Monday by Education Secretary Linda McMahon, marks the end of a pandemic-era freeze that shielded millions of borrowers from debt collection efforts. Beginning May 5, the department will reinitiate its partnership with the Treasury Department to collect past-due student debt through involuntary means, including the federal offset program and wage garnishment.

Roughly 5.3 million borrowers are currently in default on their federal student loans. An additional 4 million are considered at risk, with their accounts more than 90 days past due. According to department data, less than 40 percent of all borrowers are current on their loans.

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