Student Loan Collections Are Back—

Here’s What You Need to Know

April 30, 2025

Hey Simplifiers,

After a long pause, student loan collections are officially resuming—and if you’re a borrower, that could mean some major changes. Whether you’re just restarting payments or facing collection efforts, staying informed can help you avoid surprises (and unnecessary fees). Let’s walk through exactly what’s happening, what it means for you, and the smart steps to take today.

What’s Happening?

The U.S. Department of Education announced it’s resuming student loan collection efforts on borrowers who defaulted before the pandemic forbearance period.

This includes:

  • Wage garnishment (taking part of your paycheck)

  • Treasury offsets (taking your tax refund or Social Security benefits)

  • Collection agency outreach

What This Means for Borrowers

  • If you’re in good standing, keep making your regular payments. Nothing changes yet!

  • If you defaulted before March 2020, you could now be at risk of collection activities.

  • If you're unsure of your status, checking your account immediately is critical.

What You Can Do Right Now

1️⃣ Check Your Loan Status
Visit studentaid.gov or call your loan servicer. Don’t wait for a collection letter—be proactive.

2️⃣ Consider Fresh Start
The Department of Education's "Fresh Start" program lets eligible borrowers exit default status and return to good standing. It could help you avoid collections altogether.

3️⃣ Explore Income-Driven Repayment (IDR) Plans
Lower your monthly payment to something manageable, sometimes as low as $0, based on your income.

4️⃣ Know Your Rights
Collectors must follow strict rules. If you feel harassed or mistreated, you have rights under the Fair Debt Collection Practices Act.

You’re not alone in this. The key is staying informed, taking action early, and seeking help if needed. Don’t wait until collections start—get ahead of it now.

We’re here to simplify the hard stuff,
C🩶
Founder of The Simple Adult

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