The Trump administration has resumed aggressive collection efforts on defaulted federal student loans, potentially affecting millions of borrowers. The U.S. Department of Education began alerting 195,000 borrowers this week that their federal benefits, including Social Security, may be garnished within 30 days.
The effort ends a five-year pause in federal student loan collections that began during the pandemic. Later this summer, the Treasury Department plans to notify 5.3 million borrowers in default that their wages are also subject to garnishment, marking a sharp shift from the previous administration’s approach. Under federal law, up to 15% of a borrower’s wages can be seized to repay outstanding loans.
According to TransUnion data on student loan delinquencies, 31% of federal student loan borrowers with a payment due were 90 or more days past due as of April 2025—a record high. That figure was 20.5% in February and just 11.7% before the pandemic. An estimated 1.8 million borrowers could move into default by July, with another 3 million at risk by September.
Borrowers newly reported as delinquent have seen their credit scores drop by an average of 60 points. Some experts warn that garnishing retirement benefits could place older borrowers at risk of not affording essentials like food or medical care. Nearly 3 million borrowers aged 62 and older still owe federal student loans, a 71% increase since 2017.
The Department of Education encourages those in default to contact the Default Resolution Group to explore options such as forbearance, loan rehabilitation, or enrolling in income-driven repayment plans. Officials note that while garnishment notices are typically sent 65 days in advance, some borrowers may have received them before COVID-related pauses took effect.
More than 43 million Americans owe a combined $1.6 trillion in federal student loan debt. As collections resume, millions of borrowers face renewed financial pressure, credit damage, and reduced income just as the cost of living continues to rise.
