The American Secretary of Education Linda McMahon smiled during the signature event for a decree to close the Ministry of Education next to the American president Donald Trump, in the east house of the White House in Washington, DC, United States, on March 20, 2025.
Carlos Barria | Reuters
In a Wall Street Journal On-EdThe American secretary for education, Linda McMahon, explained the United States Department of Education decision has restart the collections on Federal student loans who are in default – and what comes to Borrowers of federal student loans who are late on their invoices.
“On May 5, we will start the travel process of around 1.8 million borrowers in the reimbursement plans and restart the loans in default,” McMahon wrote in OP-ED on Monday.
“Borrowers who do not make payments in time will see their credit ratings drop, and in some cases their salary has automatically garnished,” wrote McMahon.
Following steps for borrowers
Borrowers of federal student loans In default, he will receive an email over the next two weeks by making them aware of this new policy, said the Department of Education.
These borrowers must contact the government Default resolution group To make a monthly payment, register for a income focused on income or register to loan rehabilitation.
The Department of Education said that it extended federal operations of calling for students with weekends as well as updating a “loan simulator” to help borrowers calculate their reimbursement plans. There is also an artificial intelligence assistant, nicknamed Aidan, to help a financial strategy.
“We are committed to ensuring that borrowers reimburse their loans, that they are fully supported to do so and that colleges cannot create such massive responsibility for students and their families, compromising their ability to achieve the American dream,” wrote McMahon.
“Be proactive”
Borrowers who are late in their required payments should avoid being placed in default by taking advantage of various options currently available to them to manage their educational loans, advised Kalman Chanly, consultant in financial aid and author of the “paying for college” of the Princeton Review.
“Be proactive,” he said. “It is preferable to take care of this as soon as possible, because the loan and customer support services of the United States Ministry of Education will become more busy the more May 5.”
The Department of Education has not collected on student loans by default since March 2020. After the Covid pandemic – it's a break On federal payments on student loans expired in September 2023, the Biden administration offered borrowers another year in which they would be Protected from the impacts of missed payments. This rescue period officially ended on September 30, 2024.
“President Biden has never had the power to forgive student loans in all areas, as the Supreme Court was held in 2023,” wrote McMahon. “But for political purposes, he suspended the carrot of forgiveness of loans before young voters, among others by keeping in place a temporary postponement program of the era cocovated.”
McMahon said that the restart of the default loan collections was not intended to “be nasty for borrower students”. On the contrary, the new policy intended to protect taxpayers. “The debt does not disappear; it is transferred to others,” she said. “If the borrowers do not pay their debts to the government, the taxpayers do it.”
Currently, About 42 million Americans Contain federal student loans and approximately 5.3 million borrowers are in default.
“It is really time to start repayment again,” said Maya Macguineas, chairman of the committee for a federal budget responsible in a press release. “While a short reimbursement break was justifiable at the start of the pandemic, it was five years ago – and that makes no sense today.”
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President Donald Trump In March, signed a decree aimed at dismantling the Department of Education after appointing McMahon for Education Secretary. Trump suggested that she would help empty the agency. As part of this overhaul, federal management of students offbeat At Small businesses.
In addition to changes to the student loans system, the Trump administration has revised some of the income -focused reimbursement plans of the Ministry of Education, which put risky borrowers in “Economic Limbo”, according to Mike Pierce, executive director of the Student Borrower Protection Center.
“For five million people in default, federal law gives borrowers a way to get out of the defect and the right to make loan payments that they can afford,” pierce said in a statement. “Since February, Donald Trump and Linda McMahon have blocked the path of these out of defect borrowers and now feed them in the mouth of the government's debt collection machine.”
