Navigating the Return of Federal Student Loan Collections: What You Need to Know

After a five-year pause brought on by the pandemic, federal student loan collections officially resumed on May 5, 2025 . This change affects over 5 million borrowers currently in default—and it's causing real concern for those still trying to recover financially. 

What's Happening Now 

The Department of Education has restarted collection efforts on federal loans that have been in default. That means borrowers who haven't made payments for 270 days or more are now at risk of serious consequences, including: 

• Wage garnishment 

• Seizure of tax refunds 

• Reductions in Social Security benefits 

For many, these collection efforts feel like a sudden and overwhelming blow. Some borrowers—especially older individuals and those on fixed incomes—may not have been prepared for the restart and are now facing urgent financial decisions with little notice.

Why This Is a Big Deal

Letters have already gone out to defaulted borrowers, warning them that garnishments could begin as soon as early June. And with minimal advance notice, the burden now falls on borrowers to navigate the complex repayment system, often with limited guidance and slow response times from servicers.

The reality is that this situation is creating confusion and financial strain. Some borrowers are only now learning how far behind they've fallen, while others are unsure what steps to take next to get out of default—or avoid it altogether.

How Borrowers Can Move Forward

The Department of Education encourages those in default to reach out and set up a plan, whether it's through loan rehabilitation , consolidation , or entering into an income-driven repayment (IDR) plan to regain control and avoid further penalties. But navigating those options alone can be daunting—especially with system delays and long wait times.

A Steady Guide Through the Chaos

Navigating student loan collections can be overwhelming—especially when the rules seem to change overnight. Between wage garnishments, tax refund seizures, and a lack of clear communication from servicers, many borrowers are left feeling uncertain about what to do next.

That's why having expert support matters. 

TitanPrep has been helping borrowers for years through shifts in policy, repayment plan changes, and program disruptions. We understand the systems, the timelines, and the relief options—and we're here to help you sort through your choices with confidence. 

|f you're unsure how the return of collections may affect you, or you just want to avoid missteps that could cost you financially, you don't have to go it alone. TitanPrep can provide the clarity and guidance you need to take control of your loan situation and move forward—without the added stress. Call us for a free consultation +1 (800) 547-2258