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The Ministry of Education is poised to resume its default federal student loan collection in May for the first time since 2020.
The first Trump administration suspended introducing federal student loans to collections in March 2020 at the start of the Covid-19 pandemic, but the extension led Trump administration officials to worry that their portfolio of federal student loans “is heading towards a financial cliff if they don’t start paying off in the collection.”
“As a result, our federal student loan portfolio continues to grow, with record borrowers at or at risk of delinquency and default,” a senior department official told reporters Monday.
Officials said only 40% of borrowers are making quick payments to the loan while the remaining 60% is behind.
Cuts in staffing in education sector have not hit FAFSA offices amid Trump’s cuts, the agency says
President Donald Trump will speak at the White House on March 20, 2025.
Overall, officials said there are 4 million borrowers in late stages of payments. In other words, payments are 180 days late from 91 days.
“Trump administration, [the] Current administrators believe that American taxpayers can no longer be useful as collateral for student loans, according to a senior official, “we have to pay off student loan debt.”
Similarly, officials said they would deploy communications plans to encourage borrowers to let borrowers know their status and register with cars to reduce the number of delinquents.
The policy will take effect on May 5th, when the education department partners with the Treasury’s offset program to begin collecting expired payments.
Authorities also said the Ministry of Education is preparing to participate with lawmakers in efforts to reform the higher education and student loan repayment system.
“We fully believe that from now on, Congress will play a role in modifying the higher education system, where students are in a position to pay loan payments,” said a senior department official. “So we look forward to working with Congress on efforts to streamline loan repayments and reducing university costs.”
The bipartisan law in the work includes Senator John Toon and D-Va, who introduced a permanent clause in 2026 that sets a permanent clause that appoints employers to contribute up to $5,250 tax-free on employee loans.
Nicole Malliotakes (Rn.Y.) and Scott Peters of D-Calif introduced the law in the House of Representatives.
Trump still needs Congress’ help on plans to abolish the education sector
President Donald Trump will sign an executive order to reduce the size and scope of the education sector, along with school children signing his version at a March 20, 2025 White House ceremony.
Nearly 43 million student borrowers have federal student loan debt, with federal student loan debt of $1.6 trillion, according to data from the Department of Education.
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The Department of Education announcement will work with the president’s campaign promise after the Trump administration announced an overhaul of government agencies in March to eliminate the federal government’s impact on education that “stops taxpayer dollar abuse to inculcate American youth.”
Still, President Donald Trump has announced that other institutions will continue to function in the department that oversees Pell’s grants, student loans and more, serving people with special needs.
Diana Stancy is a political reporter for Fox News Digital, covering the White House.
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