Collections for defaulted student loans restart for borrowers, ending COVID pause

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” U.S. Secretary of Education Linda McMahon said.

By Natalia Mittelstadt

Published: May 5, 2025 3:40pm

The Education Department on Monday restarted collecting on defaulted student loans after ending a pause that began during the COVID-19 pandemic.

More than 5 million borrowers have defaulted on their student loans, and the number could double within a few months, per the Trump administration.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said in a statement, CNBC reported.

The federal government can seize borrowers' disability benefits, tax refunds, Social Security retiremnt, and paychecks as part of its collection powers on student loans.