The U.S. Education Department has announced that student loan repayments will resume starting May 5, affecting about 5.3 million borrowers currently in default. These borrowers will receive notices within the next two weeks before the department begins involuntary collections, which can include withholding tax refunds, federal salaries, and other government benefits. Wages may also be garnished after a 30-day warning.

Student loans went into pause during the Covid-19 pandemic under Trump’s administration, and Biden later canceled loans for over 5 million people. However, broader forgiveness efforts were blocked by courts, including a 2023 Supreme Court ruling that struck down Biden’s plan for lack of congressional approval. As a result, many borrowers remain in default or behind on payments.

Loans go into default when payments are missed for nine months, damaging credit scores and leading to collections. Besides the 5.3 million in default, around 4 million borrowers are 91 to 180 days behind on payments. Less than 40% of all borrowers are currently up to date on their loans.

Education Secretary Linda McMahon criticized the previous administration’s approach, emphasizing that the executive branch lacks the authority to erase debt. She pledged that the department will now manage the student loan program responsibly and help borrowers return to repayment for their financial health and the country’s economic stability.

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