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As of May 5, 2025, the U.S. Department of Education is resuming debt collection on defaulted federal student loans after a years-long pause during the COVID-19 pandemic.
For millions of borrowers, this marks a return to aggressive enforcement measures such as wage garnishment, tax refund seizures, and even the withholding of Social Security benefits.
If you're unsure whether your loans are in default, now is the time to find out-before enforcement actions begin. According to the Department of Education, a federal student loan is considered in default if payments are at least 270 days past due.
Key steps to confirm your loan status
- to your at StudentAid.gov:
The easiest and most reliable way to check your loan status is by logging in to StudentAid.gov. Using your FSA ID, you can access your full loan details. If your loans are listed as being held by a collection agency or marked as "defaulted," you are subject to collections.
- Pull your credit report:
You are entitled to a free credit report every 12 months from each of the three major bureaus-Equifax, Experian, and TransUnion-via AnnualCreditReport.com. A defaulted loan will show up as a derogatory item, which also negatively impacts your credit score.
- your loan servicer or collection agency:
If you're still unsure, reach out directly. Loan servicers can explain whether your loan is in good standing, delinquent, or in default. If it's been transferred to collections, you may be directed to a different agency managing your debt.
"Borrowers who are in default should not ignore it," said Amy Czulada, program director at the Student Borrower Protection Center. "This is a really good time to figure out where you are in the system."
What to do if you're in default
If your loans are in default, you still have options. The Department of Education's "Fresh Start" initiative allows eligible borrowers to bring their loans back into good standing without having to make a payment upfront.
According to the Department, this opportunity will only be available for a limited time following the resumption of collections.
Borrowers can also explore loan rehabilitation or consolidation to exit default. These options may stop garnishment and restore eligibility for income-driven repayment plans and federal financial aid.
Ignoring a defaulted loan now could result in the government garnishing up to 15% of your disposable income, intercepting tax refunds, or seizing a portion of Social Security benefits.
As collections resume in May 2025, the key is to act early. Know your status, understand your rights, and take advantage of programs that can help you regain financial stability.