What the restart of defaulted student loan collection means for borrowers

The Department of Education restarted collections of loans in default on Monday, putting millions of borrowers at risk of having their benefits and wages garnished. Here’s what to know.

The Department of Education restarts collections of loans in default on Monday, putting millions of borrowers at risk of having their benefits and wages garnished. The move arrives as the Trump administration works to dismantle the Education Department and aggressively roll back former President Joe Biden’s policies, including those around student loan forgiveness. It’s expected to affect the more than 5 million borrowers who are in default. And that number could rise over the next few months: There are 4 million additional borrowers in “late-stage delinquency,” which occurs after 90 days without payment, the department said in a news release last month. Here’s what we know so far: Federal student loans go into default after 270 days without payment. If you are not in default, the move to restart sending loans in default to collections will not affect you. When a student loan goes in default, it will be reflected on your credit report. You can check on the status of your loan by reaching out to your student loan servicer or visiting the Federal Student Aid website for more information. Experts who spoke with CNN recommend that even if you know your loans aren’t in default, you should still check on the status of your loans and stay informed on options available to you.