Taxpayers have received fantastic news from the Trump administration: they will not have to bear the burden of footing the bill for those behind on student loan payments.
The administration is ending five-year student loan leniency, sending 5 million defaulted loans to collections starting May 5.
After years of liberal policies enabling irresponsible borrowers, the Department of Education will now reinstate wage collections and tax refund seizures to protect American taxpayers from paying for $1.6 trillion in student debt.
This decisive action targets approximately 5 million borrowers who have not made payments on their loans, along with an additional 4 million borrowers who are nearing default status.
Under the Trump administration’s direction, the Department is taking aggressive steps to protect taxpayers from bearing the financial burden of unpaid education loans.
Collections will restart through the Treasury Offset Program, which can include wage garnishments and withholding tax refunds from borrowers.
The Department’s new approach stands in stark contrast to the Biden-Harris administration, which had paused collections and repeatedly promised mass loan forgiveness that never materialized.
Only 38% of borrowers are currently meeting their loan obligations, leaving the majority of the $1.6 trillion student debt burden at risk of default.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said Secretary of Education Linda McMahon.
Borrowers who have defaulted—defined as those who have not made payments for 270 days—will receive email notifications directing them to government resources.
The Department plans to launch an extensive communications campaign urging them to contact the Default Resolution Group for repayment options, though no mass loan forgiveness will be offered.
The impact of default goes beyond immediate financial consequences. Defaulting harms credit scores, affecting borrowers’ ability to secure other loans for essentials like homes and vehicles.
The Department will begin garnishing wages later this summer, automatically deducting payments directly from the paychecks of those who continue to avoid their obligations.
Reflecting the administration’s commitment to fiscal responsibility, the Department is also working to transfer the massive $1.6 trillion student loan portfolio to other agencies, with plans to move it to the Small Business Administration.
This reorganization aims to bring accountability and efficiency to a system plagued by liberal mismanagement.
Notably, older Americans face significant consequences from this enforcement action.
Nearly 40% of federal borrowers over 65 are already in default, and collections may affect their Social Security benefits.
While borrowers will have access to new tools like the Loan Simulator and AI Assistant to help navigate repayment options, the message is clear: those who borrowed money for education are expected to pay it back.
The days of expecting taxpayers to absorb the costs of others’ education decisions are over.
YIKES: Only 38% of student loan borrowers are up-to-date on their payments.
Even after a 3.5 year payment pause…
4 million borrowers are between 3-6 months behind
5 million are 9+ months behind pic.twitter.com/dK87h3oZbh— Angela Morabito (@AngelaLMorabito) April 21, 2025
