On May 5, 2025, the Department of Education (DOE), through its Office of Federal Student Aid (FSA), will begin involuntary collection of student loans that are in default. According to the DOE, this collection affects approximately eight million borrowers who are in default. Student loans haven’t been collected since March 2020, including those in default.
What measures will the Department of Education take to collect these funds? And how will it ultimately affect borrowers?
Millions of Borrowers in Default
According to a Department of Education news release, 4.7 million borrowers owe more than $1.6 trillion in student debt.
According to the April 21 release, five million of those borrowers haven’t made a monthly payment in over 360 days and sit in default. And many of these five million haven’t made a payment in more than seven years. And, finally, four million borrowers are in late-stage delinquency, between 91 and 180 days….