April 22, 2025 - 10:41
The Department of Education has officially announced that it will recommence the collection of federal student loans in default starting May 5. This decision marks the end of a nearly five-year pause on collections that was implemented during the pandemic. The moratorium was initially introduced to provide relief to borrowers facing financial difficulties due to the economic impact of COVID-19.
As the deadline approaches, borrowers are being urged to prepare for the resumption of payments. The Department has indicated that it will offer resources and support to assist individuals in navigating their repayment options. This includes information on loan rehabilitation and various repayment plans that may be available to help borrowers manage their debts effectively.
The resumption of collections is expected to affect millions of borrowers who have been in default for an extended period. Stakeholders are closely monitoring the situation, as the transition back to regular payment schedules could pose challenges for many individuals still recovering from the financial repercussions of the pandemic.
