Protecting American taxpayers from footing the bill for borrowers, the Trump administration has ended Biden-era leniency on student loan defaulters.
Beginning May 5, some 5 million Americans with defaulted student loans will face mandatory collections after a five-year pause.
The move signals a return to fiscal responsibility after years of Democrat policies encouraging borrowers not to repay their obligations.
Education Secretary Linda McMahon announced that the Department of Education will resume collection activities on defaulted federal student loans.
The move ends the extended pause initiated during the COVID-19 pandemic and continued by the Biden-Harris administration.
The decision affects over 5 million borrowers currently in default, with another 4 million on the brink of default.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said U.S. Secretary of Education Linda McMahon.
The Treasury Offset Program will restart, allowing the government to garnish wages, tax refunds, and even Social Security benefits to recover unpaid student debt.
This marks a stark contrast from the Biden-Harris administration’s approach, which repeatedly extended payment pauses and tried to implement mass loan forgiveness schemes that would have cost taxpayers billions.
Under the resumed collections, borrowers who have not made a payment in 270 days will face immediate consequences.
While Democrats have criticized the timing amid economic uncertainty, the Trump administration maintains that the $1.6 trillion student loan portfolio, held by 42.7 million borrowers, must be managed responsibly.
The Education Department plans to launch new tools to help borrowers navigate repayment options, including a Loan Simulator and an AI Assistant called Aiden.
However, the administration has made it clear: no mass loan forgiveness will be offered. Borrowers are expected to honor their obligations.
Currently, only 38% of federal student loan borrowers are making their payments on time.
Particularly concerning is that nearly 40% of federal borrowers over age 65 are in default, placing a significant burden on seniors.
Plans are underway to transfer the massive student loan portfolio to other agencies, potentially moving it to the Small Business Administration.
This reorganization aims to create more accountability in a system that has allowed too many borrowers to evade their financial responsibilities while forcing hardworking Americans to subsidize others’ education costs.
Borrowers in default will receive notifications via email with instructions to contact the Default Resolution Group.
While the department will offer payment plan options, the message is clear: the days of ignoring student loan obligations without consequences are over.
