On May 5, 2025, the U.S. Department of Education will resume involuntary collections on defaulted federal student loans. This follows a multi-year pause that began during the COVID-19 pandemic – and it’s a significant shift for borrowers who are already managing other forms of unsecured debt, such as credit cards.
What’s changing on May 5?
If your federal student loans are in default, the government is resuming active collection efforts through several key measures:
– The Treasury Offset Program will be reinstated, allowing the government to withhold funds such as tax refunds and Social Security benefits to recover defaulted student loan balances.
– Tax refunds and Social Security payments may be withheld.
– Notices will begin going out this summer to initiate wage garnishment for borrowers who remain in default.
– More than 5 million borrowers are at risk of being impacted.
It’s worth noting that interest on federal student loans resumed in October 2024 – but May 5 marks the beginning of enforced collections.
Already dealing with credit card debt?
If you’re managing high-interest credit card debt and now face the added strain of renewed student loan collections, it may be time to take a closer look at your broader financial picture.
At National Legal Center, we work with individuals facing significant unsecured debt and help them understand their legal rights, potential options, and how to move forward.
We can:
– Review your credit card situation in full
– Work with you to pursue resolution options with creditors
– Provide legal guidance and support throughout the process
– Help you take action before financial pressure escalates
While we can’t assist with student loan debt directly, addressing other areas – like credit card balances – may help restore balance to your financial life.
Ready to Talk?
If you’re worried that debt may affect your security clearance, don’t wait. Reach out to the legal team at National Legal Center for a free evaluation. Call 800-747-2614 or visit nationallegal.com to learn more.
Complete this form to schedule your free consultation.
