Monday marks the end of a five-year reprieve for federal student loan borrowers, as the Trump administration begins to put millions of defaulted borrowers into collections. For some, that will mean seized wages and credit scores plummeting by almost 200 points.
The Department of Education has not collected on defaulted loans since March 2020, when a host of changes were made to loan collection and billing to help borrowers during the COVID-19 pandemic. Now, the Trump administration is resuming the practice and threatening to garnish defaulted borrowers’ wages, tax refunds, and federal benefits—such as Social Security—at a time when Americans are already struggling amid high prices and widespread economic uncertainty related to President Donald Trump’s chaotic tariff policies.
