Trump administration plans aggressive student loan debt collection

The Trump administration is reportedly preparing to aggressively pursue individuals who have defaulted on federal student loans. This federal push aims to recoup delinquent debt through methods such as wage garnishment and the seizure of tax returns.

Approximately one in five federal student loan borrowers are currently in default, defined as being more than nine months behind on payments. This figure saw a significant increase following the conclusion of the pandemic-era payment pause in 2025.

Under the proposed plan, the government may hire private debt collectors as early as November, though officials have indicated a preference to wait until after the midterm elections. The responsibility for collecting these defaulted loans was recently shifted from the Department of Education to the Department of the Treasury.