Trump admin ends Biden's free ride: 5+ million deadbeat student loan borrowers to face collections

President Donald Trump's Department of Education announced Monday that it will soon end the former Biden administration's free ride for student loan borrowers in default.

The ED's Office of Federal Student Aid will restart collections on May 5 for more than five million borrowers who have not made a payment for at least 360 days. Another four million borrowers — not yet considered to be in default — have not paid in 91 to 180 days.

"As a result, there could be almost 10 million borrowers in default in a few months. When this happens, almost 25 percent of the federal student loan portfolio will be in default," read a press release from the ED.

'The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear.'

According to the department, 42.7 million student loan borrowers owe over $1.6 trillion. It noted that most borrowers are either delinquent or in an interest-free forbearance or deferment period.

"Only 38 percent of borrowers are in repayment and current on their student loans," it said. "Resuming collections protects taxpayers from shouldering the cost of federal student loans that borrowers willingly undertook to finance their postsecondary education."

The department has not collected on its defaulted student loans since March 2020, despite Congress mandating repayment in October 2023.

Trump's ED slammed the former administration for its refusal to lift the pause on collections, which "kept borrowers in a confusing limbo."

It further noted that under former President Joe Biden, the ED "failed to process applications for borrowers who applied for income-driven repayment and continued to push misguided 'on-ramps' and illegal loan forgiveness schemes to win points with borrowers and mask rising delinquency and default rates."

Over the next couple of weeks, the FSA will notify those currently in default about the payment restart. It will begin sending notifications of wage garnishments "later this summer," the department stated.

ED Secretary Linda McMahon said, "American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies."

"The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear," she continued. "Hundreds of billions have already been transferred to taxpayers. 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."

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