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Starting May 5, approximately 5 million Americans with defaulted student loan payments will have their loans sent for collections, as announced by the Department of Education. 

The Details: “American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Secretary of Education Linda McMahon said. This marks the first time since student loan payments were paused due to the COVID-19 pandemic that the Education Department will begin collecting the debts of borrowers who defaulted. The Department of Education said around 42.7 million borrowers own more than $1.6 trillion in student loan debt, and 5 million haven't made a payment in over a year. Another 4 million, not yet considered in default, haven't made a payment in 91-180 days.

For Context: Several Federal Student Aid (FSA) employees have been terminated at the Department of Education as part of President Donald Trump's efforts to shutter the agency, which has raised concerns for borrowers and the future of the student loan system. 

How The Media Covered It: ABC News (Lean Left bias) cited concerns from former Under Secretary of Education James Kvaal about the potential negative impact on borrowers, adding that the Trump administration's cuts to the department would make it harder for those who have missed payments to get back on track. Breitbart (Right), on the other hand, quoted McMahon and emphasized the Trump administration's effort to cut down debt. The Blaze (Right) said the Trump administration ended Biden's “free ride” for “deadbeat” borrowers. 

Revised by the AllSides staff (of humans) after a first draft from our custom AI. Learn more. Support our missionSuggest an improvement to this summary.

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The U.S. Department of Education announced on Monday that it would resume involuntary collections of defaulted federal student loans on May 5. The announcement means that borrowers who have loans in default could see their tax refunds seized or wages garnished. While many borrowers and advocacy organizations will oppose the move, resuming collections is necessary to incentivize loan repayment. The announcement was never a matter of if, but when.

The current student loan mess

Some 5 million Americans with defaulted student loan payments will have their loans sent for collections on May 5, the Department of Education announced on Monday.

Next month, for the first time since student loan payments were paused due to the onset of the COVID-19 pandemic, the Education Department will collect the debts from borrowers who had defaulted -- which means they hadn’t paid their debts for around nine months or 270 days -- before the pandemic.