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. If you take action now, you may be able to stop or delay collections. Help is available—don’t wait until your paycheck, benefits, or tax refunds are gone!
Watch NCLC’s video on student loans in default now for more information. You can also use NCLC’s Student Loan Toolkit to help you identify what options you may have to deal with your student loan debt.
What can the government do to collect student loan debt?
If you’re in default, the Department of Education can:
- Garnish up to 15% of your paycheck;
- Seize your federal tax refunds;
- Take up to 15% of your Social Security benefits, as long as your remaining monthly benefit stays above $750–the government has said they will not be taking Social Security benefits right now, but this may restart again at any time;
- Send your account to debt collectors; and
- Report negative information to credit bureaus.
Unlike other types of debt collection, the government can take these steps without going to court (in some limited cases, the government may file a lawsuit to collect the debt, but this is not required and doesn’t happen often). 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.
Student loan debt collection can hurt your ability to get housing, car loans, or even certain jobs. If you have federal loans in default or are behind on your federal student loan payments, including Direct Loans, Perkins Loans, and FFEL Loans, take steps now to avoid collection.
What should you do right now?
1. Check to see if your loans are in default.
Check if you’re in default on your federal student loan by logging into your account at studentaid.gov. A warning box should appear at the top of your Dashboard letting you know if you have student loans in default. From your Dashboard, you can also click on “View Loans” to review the status of each of your loans to see if you are in default, if you are delinquent (behind on your payments but not yet in default), or if you are in good standing. You can also check the status of your federal student loans by logging into your account with your loan servicer.
2. See if you qualify for loan forgiveness or cancellation.
One way to deal with defaulted student loans is to see if you qualify to have your loans forgiven or canceled through one of the Department of Education’s loan discharge programs. For example, if you are disabled and can’t work, you may be able to have your loans canceled and discharged, even if they are in default, through the Total and Permanent Disability Discharge Program. See our page on cancellation and forgiveness options, or watch this video to see if you qualify.
3. If you are in default, take steps to get out of default.
If you are in default, look at options for getting out of default. Right now, there are only two real ways to get your loans out of default if you cannot afford to pay the loans in full. You can either complete a loan rehabilitation or consolidate your loans to get them out of default. Once you are out of default, make sure to sign up for an income-driven repayment plan (IDR) if you can’t afford the standard repayment and want to avoid falling behind on your loan payments again. Watch our video on dealing with default for more information.
4. If you aren’t in default, but you are struggling with payments, consider signing up for an IDR plan.
If you are not yet in default, but you are struggling to afford your loan payments or are delinquent, look into an income-driven repayment (IDR) plan. Your payments could be as low as $0 per month, and you could earn credit toward loan forgiveness while in an IDR plan. If you can’t afford an IDR plan, consider a deferment or forbearance to temporarily pause your student loan payments. Watch our video on different options for managing your student loan repayments.
5. If you got a notice of an upcoming collection action, review your options for stopping it.
If you’re facing a collection action that you don’t agree with, such as a tax refund or Social Security benefits offset, you can either challenge the debt if you believe it’s invalid or already paid, or request a financial hardship review if you can’t afford collections and are facing some serious financial hardship such as an eviction, utility shut-off, or forclosure. The steps to try to stop a collection action may be different depending on what type of collection you’re facing. The government may also be changing the way it collects and manages student loan defaults in the future, so make sure to check the Federal Student Aid website page on collections for updates on the process.
Note: It can be difficult to stop a collection action from happening, so you should still look at other options to get out of default to avoid any more collections from taking place. For more information, visit the Federal Student Aid website’s collections page.
