The Trump Administration Will Restart Collecting Payments of Defaulted Federal Student Loans on May 5, 2025
On April 21, 2025, the Trump administration announced that starting May 5, 2025, payments on defaulted student loans will resume. Formerly, payments on defaulted student loans have been paused since March 2020.
In their press release, the Trump administration highlighted that collecting these loans “will be paired with a comprehensive communications and outreach campaign to ensure borrowers understand how to return to repayment or get out of default.” The Department of Education has recommended that borrowers in default contact the Default Resolution Group to make monthly payments, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. Moreover, the Department intends to commence with wage garnishment later in the summer. Meanwhile, the Office of Federal Student Aid (FSA) will make contact with borrowers in default to share these updates with them.
In addition to the social media and email campaign on loan repayment, FSA has said it will provide support to borrowers by sharing updated information about student loan payment options. This includes providing resources like the “new Loan Simulator, AI Assistant (Aiden), and extended servicer call times.” The Department has also announced that FSA will launch an “enhanced Income-Driven Repayment (IDR) process, simplifying the time that it will take borrowers to enroll in IDR plans.” The purpose of this enhancement is to end the requirement where borrowers must recertify their income annually.
The Department intends to publish more information on StudentAid.gov.
ACCT will update this and other resources with updated information as it is released. In the meantime, please contact [email protected] with any questions.
Student Loan Cohort Default Rates
As loan repayments for all eligible borrowers pick up and the Department of Education resume the practice of tracking delinquency and sending borrowers who default into collection, Cohort Default Rates (CDR) will once again begin factoring into community colleges' accountability metrics. To learn more about the role of CDRs and community colleges or get a refresher on how they can impact the colleges' ability to participate in Title IV fedral financial aidp rograms, please check out our recently published FAQ document:
Student Loan Cohort Default Rates and Community Colleges FAQ