The announcement represents a significant shift in federal student loan policy. No loans have been sent to collections since March 2020, when President Donald J. Trump ordered a freeze on payments and interest as a temporary measure to aid borrowers during the pandemic. The Biden administration extended the moratorium multiple times, finally allowing it to expire in October 2024.
“This is cruel, unnecessary and will further fan the flames of economic chaos for working families across this country,” said Mike Pierce, the executive director of the Student Borrower Protection Center, a nonprofit advocacy group.
The resumption of collections marks a broader pivot in federal approach following a period of ambitious — and frequently thwarted — efforts to cancel student debt. President Biden sought sweeping forgiveness for millions of borrowers, but his most ambitious plan was struck down by the Supreme Court. Nonetheless, his administration has still managed to erase over $183 billion in student debt through targeted relief programs, aiding more than 5 million Americans.
In a statement on Monday, Education Secretary Linda McMahon defended the department’s decision, characterizing the return to collections as a necessary course correction.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” McMahon said. “Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation’s economic outlook.”