Collections Have Restarted!
On May 5, 2025, the federal government restarted collections on federal student loans that are in default. That means if you haven’t made a payment on your federal student loans in more than 270 days, you could soon face serious consequences, including losing your tax refunds, a portion of your wages, and even some of your Social Security benefits. Unlike other types of debt collection, the government can take these steps without going to court. There is no statute of limitations on collecting federal student loan debts. This means you could face collection actions for debts that are years old.
Take steps now to make sure your loans aren’t in default! If you are in default, act quickly to get out of default and avoid collections.
What is a default?
You are in default on most federal student loans if you miss payments for nine months in a row (270 days). If you start to fall behind on student loan payments, don’t wait to fall into default. Act now to avoid defaulting. Contact your loan servicer to see if you are eligible for a more affordable payment plan, a deferment or forbearance, or another way to get temporary relief.
What are the consequences of defaulting on federal student loans?
If you default on your federal student loans, the government may be able to seize money from your federal tax refunds or Social Security benefits and garnish your wages without a court order. Additionally, you will not be eligible for new federal student loans or grants if you are in default on a federal student loan, making it hard to go back to school. Default also hurts your credit history and score, which can make it harder or more expensive to get housing or loans. Collection fees can also be added to defaulted loans, and interest continues to be charged, making your loans harder to pay off over time.
How does the government collect defaulted student loan debt?
The three most common ways the government collects student loan debt are:
In more limited cases, the government will also file lawsuits against borrowers with defaulted student loan debt to try to get a court order to collect on the debt. The government does not file these cases as often because it can easily collect on the debt without a court order. If you have been sued recently for a student loan debt, it is likely that you were sued for a private student loan debt, but you should talk to an attorney to confirm this.
