JACKSONVILLE, Fla. — Big changes are ahead for millions of Americans with federal student loans.
Starting Monday, the U.S. Department of Education will resume collections on loans that are in default, marking the final phase of pandemic-era student loan relief to end.
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That means borrowers who haven’t made payments in years could now face garnished wages, seized tax refunds, and even reduced Social Security checks.
More than 5 million Americans are currently in default, and another 4 million are at least 90 days past due, according to the U.S. Department of Education.
Experts say now is the time to act.
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“There are still three different income options for federal student loans,” Brian Walsh, Head of Advice and Planning at SoFi, said.
“Payments are capped at a percentage of your income. You also have extended repayment or refinancing to help fit your budget,” Walsh said.
Borrowers currently in school or considering new loans should think carefully about how much debt to take on.
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“Project forward and think about what the average earnings are when you graduate,” Walsh said. “Let that dictate how much you’re willing to borrow.”
University of North Florida parent Joanne Jones said she’s already seeing the impact on her family.
“I have nurses and doctors in my family that are swamped,” Jones said. “We’re struggling now. What are we going to do… years from now?”
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If you’re unsure of your loan status, visit StudentAid.gov to check for updates, confirm your contact info, and explore repayment options.
Borrowers in default should expect to hear directly from the Federal Student Aid office with the next steps in the coming weeks.
The key advice from experts: don’t wait. The sooner you act, the more control you’ll have over how — and when — you repay.
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