04.24.2025 By Amy Miller, AFC®

How to Prepare for the Return of Federal Student Loan Collections

Student loans can be a heavy weight, emotionally and financially. If you’ve fallen behind or haven’t been able to make payments since the pause ended, you’re not alone. The U.S. Department of Education recently announced that federal student loan collections will resume, which can feel overwhelming for many borrowers.

 

But here’s the good news: you still have options—and support. This blog will walk you through what’s happening, what it means for you, and what steps you can take to stay on track.

So, What’s Happening?

The Department of Education recently announced that it will begin resuming collections on defaulted federal student loans in the coming months. The Department states it will use a phased approach to help borrowers transition back into repayment and minimize potential harsh impacts like wage garnishment or tax refund withholding.

They will be rolling out a series of communications and resources to support borrowers as they return to making student loan payments. Over the next couple of months, you can expect emails, social media updates, and outreach from the Federal Student Aid (FSA) office reminding you of your repayment options, and where to turn for support. 

Here’s what’s coming soon:

  • Promotion of personalized tools like the Loan Simulator to help you find the best plan.
  • Access to Aiden, an AI Assistant who can answer your questions
  • Extended customer service hours from loan servicers
  • A streamlined process for signing up for Income-Driven Repayment (IDR) plans.

Keep an eye on your inbox and visit StudentAid.gov for updates and guidance as they become available. And remember: you’re not alone in this, there are tools and support to help you navigate repayment with confidence.

What This Means For You: If your loans are in default, this is your window of opportunity. It’s not about shame, it’s about getting back on track, one step at a time. What matters now is knowing that help is available, and there are real ways to move forward. The Department will send a 60-day warning before resuming collections, giving you time to take action. 

Steps You Can Take Today

Check your loan status:
Visit studentaid.gov and log in to see whether your loans are in default or good standing. If you’re in default, understand your options. You can learn more about getting out of default here.

Getting out of default status can:

  • Bring your loan back into good standing
  • Restore access to repayment options
  • Remove default from your credit report

Explore repayment plans that work for your current financial situation: If you're feeling unsure about how you'll manage monthly payments, know that you do have options. There are repayment plans that base your monthly payment on your income and family size, which can significantly lower what you owe each month. In some cases, your payment could even be as low as $0.

If you don’t choose a plan, you’ll automatically be placed on the Standard Repayment Plan, which may not be the most affordable option.

To find the best plan for your situation, check out the Loan Simulator at StudentAid.gov. It’ll walk you through your choices and help you compare estimated monthly payments and total repayment costs.

Watch out for scams: You should never have to pay a fee to sign up for a federal repayment plan or for assistance in getting out of default. Use studentaid.gov or call your loan servicer directly.

This Isn’t About Perfection: We believe that financial confidence starts with knowledge and small, consistent actions. Student loans can feel like a mountain, but you don’t have to climb it alone—and you don’t have to climb it all at once.

If you’re a saver who’s juggling other priorities—like building an emergency fund or paying off credit card debt—we see you. Start by getting informed. Then make a plan that works for your real life, even if it’s just taking one step this week.

____________

Want Support?

Student loan repayment doesn’t have to derail your financial goals. Staying informed will help you take back control and move forward. You’ve got this—and we’re cheering you on every step of the way.

CHECK OUT OTHER SAVINGS JOURNEYS FROM SAVERS JUST LIKE YOU

SHARE YOUR SAVINGS TIP OR STORY WITH US

If we feature you in our newsletter, you get $50.

You May Also Be Interested In...

Take the America Saves Pledge

Make a pledge to yourself and create a simple savings plan that works.

Connect to a Campaign

Connect with a local America Saves campaign for one-on-one help and to learn more about savings initiatives and events in your area.

Sign-up for ASAW

America Save at Work is a hub of information and resources to help employers promote financial wellness for their employees.

Partner News & Updates

Join the America Saves email list to receive information about engaging content and events throughout the year.