The Department of Education announced Monday it will restart collections on defaulted federal student loans May 5, including potentially garnishing wages for millions of workers.
The federal agency said more than 5 million borrowers have been in default for more than a year, and in some cases, for more than seven years.
Defaulted student loans have not been collected since March 2020, when they were paused amid the economic upheaval at the start of the coronavirus pandemic.
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“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies. The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear. Hundreds of billions have already been transferred to taxpayers,” Education Secretary Linda McMahon said.
“Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook,” McMahon added.
The Treasury Offset Program allows the government to withhold federal payments, such as tax returns, for individuals in default. After a 30-day notice, the federal government could also begin garnishing a borrower’s wages.
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The announcement said defaulted borrowers will be contacted before the May deadline and encouraged to contact the Default Resolution Group to get set up on an income-driven repayment plan or sign up for loan rehabilitation.
The department stressed that only 38% of borrowers are in repayment and up to date on their loans out of the more than 45 million individuals with student loan debt.
President Donald Trump has repeatedly blasted former President Joe Biden for his leniency on student loans, making clear that the days of potential loan forgiveness are over.
