By Lauren Burke
Millions of student loan borrowers in default began receiving collection notices on May 5, marking the official end of a five-year pause in federal student loan collections. The repayment system—long criticized as confusing and burdensome—had been suspended during the COVID-19 pandemic and through various Biden administration relief policies intended to ease the financial burden on borrowers. But the grace period officially ended under the Trump administration, as the Department of Education moved forward with reinstating repayment requirements.
Between 2021 and 2024, federal student loan debt grew by more than $60 billion annually. According to NBC News, only about one-third of the nearly 43 million borrowers made regular payments during the pause. On April 21, U.S. Secretary of Education Linda McMahon issued a statement confirming that repayment would resume under the Trump administration.
Earlier this year, in late February, the Department of Education also halted the process for implementing the Saving on a Valuable Education (SAVE) plan—a key income-driven repayment initiative launched under President Biden. The SAVE plan had enrolled more than eight million borrowers and offered significantly lower monthly payments than prior repayment programs. However, it faced legal pushback in spring 2024. The U.S. Court of Appeals for the Eighth Circuit upheld a suspension of the program after lawsuits from Republican-led states challenged its legality, arguing the administration had overstepped its authority.
Despite similar executive actions taken by Republican administrations, critics charged that the lawsuits were politically motivated. President Trump, however, defended the reinstatement of collections, stating that all borrowers with outstanding student loans had a responsibility to repay them.
According to data from the Student Borrower Protection Center, the rollback of the SAVE plan could have significant financial consequences for borrowers:
- A typical borrower with a college degree is now expected to pay an additional $2,928 annually compared to what they would have paid under the SAVE plan.
- A borrower with some college but no degree may face an additional $1,761 per year in payments.
Virginia Congressman Bobby Scott, the ranking member of the House Education Committee, has remained a steadfast advocate for student loan reform. He has introduced legislation including the Lowering Obstacles to Achievement Now (LOAN) Act, which would double Pell Grant funding, improve the Public Service Loan Forgiveness program, reduce interest rates, and eliminate origination fees. Scott has consistently supported policies to expand access to higher education and reduce student debt burdens.
Yet the public debate remains divided. Conservative commentator and businessman Armstrong Williams took to social media on May 5, arguing, “Forgiving student debt would be a great gift to graduates, but so would having your mortgages, car loans, and credit card debt forgiven. Debt forgiveness is a slap in the face to all who sacrificed and worked extra jobs to pay off their student loans.”
As notices go out, the reality of loan repayment collides with an unpredictable economic climate. Whether those currently in default will be able to repay remains uncertain.
