Here's When (and How) You'll Need to Start Repaying Your Student Loans

The Department of Education announced Monday that the FSA will finally restart collections on defaulted student loans beginning May 5, 2025, following a five-year pause that began during the COVID-19 pandemic.

This decision affects approximately 5.3 million borrowers who were in default before the pause. For these borrowers, the government can soon begin collecting repayments from tax refunds, withholding Social Security benefits, and even garnishing wages (up to 15% of disposable income).

How do you know if you're already in default on your loans, or if you're at risk of defaulting soon? Here's what you need to know about the upcoming changes, and how to prepare for them.

What the end of the pause means for you

This change primarily impacts borrowers who were already in default before pandemic protections began. That amounts to around 5.3 million people, according to the Education Department. In this case, "in default" means a borrower failed to make a loan payment for at least 270 days (about nine months).

To determine if you're affected, log into your account at studentaid.gov. (Note: This is not the same portal you may typically use to make student loan payments, e.g., through a servicer like Sallie Mae.) Your dashboard should show your total debt amount, the name of your loan servicer or servicers, your monthly payment amount, and, most importantly, a warning message if you're in default.

What to do if you're in default on your student loans

Borrowers in default have three main options.

1. Repay the loans in full

I know, I know. While this is technically an option, most borrowers in default aren't in a position to pay off their entire loan balance at once. Still, it is the quickest and most effective option to deal with your debt.

2. Consolidation

This process combines and simplifies your existing federal student loans into a new Direct Consolidation Loan. Consolidation can lower your monthly payment, but increase the period of time you will have to repay your loan—resulting in more payments and more interest overall than if you didn’t consolidate. You can log in to studentaid.gov to access the online direct consolidation loan application.

3. Loan rehabilitation

With consolidation, the fact that you were once in default stays on your credit report. With rehabilitation, you can remove the default status from your credit history. To do this, you have to make a certain number—typically nine—consecutive on-time payments. The exact amount of each payment is usually based on your income.

How to choose the right repayment plan for your student loans

Once out of default (or if you're at risk, but not yet in default), you'll need to select an appropriate repayment plan. The first step you can take here is to find out exactly how much you’re expected to pay. On studentaid.gov, select “My Aid” in the dropdown menu under your name. Your loan servicer(s) should appear in that section. Clicking on “Loan Breakdown” will show you a list of the loans you received, including loans you have paid off or consolidated into a new loan.

Once you confirm your loan company, visit that servicer’s website and log in to your account to ensure all your contact information is up to date so you don’t miss any notifications from them as you take the next steps. (Do the same on studentaid.gov—make sure your contact information, including email and physical address, is current so you receive all important communications.)

Remember that you can change your repayment plan as your circumstances change. For instance, if you're experiencing financial hardship, several options can help lower your payments:

• Income-driven repayment plans that cap payments based on your income

• Economic hardship deferments if you recently lost your job

• Other deferment or forbearance options for temporary repayment relief

What you can do about your defaulted student loans right now

The Department of Education should alert all borrowers in default before May 5, via email and social media posts. They also said they will send notices of wage garnishment "later this summer."

Whatever your status, don't wait for collections to resume to take action. With not a lot of time between now this summer, it’s important to get your repayment plan in order as soon as you can.

If you're in default, here are the immediate steps you can take:

1. Confirm your status on StudentAid.gov and update your contact information so that you don't miss any communications.

2. Contact your loan servicer to discuss repayment plans.

3. Consider seeking advice from a financial counselor if you need additional guidance.

Even if you're not in danger of default today, you could be soon. Student loans have a chokehold over millions of Americans, but you have a little bit of time to put yourself in the best position to tackle yours. By taking proactive steps now, you can avoid the more severe consequences down the line.

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