The Donald Trump administration is reportedly hatching a plan to hire private debt collectors to go after Americans who have defaulted on their federal student loans, the Washington Sun reported Monday.
Measures like tax refund offset and wage garnishment were also announced by the White House. The plans of the Trump administration to go after student loan defaulters are not new. Eventually, however, they backed off.
On April 22, 2025, the Trump administration had announced that it would resume collecting pending federal student loans after the COVID-19 era pause. In January 2025, as the midterms neared, the Trump administration paused involuntary collection of federal student debt, and the policy still stands as of October 2026.
The White House Office of Management and Budget even begun working with the Education Department to start a process to automatically seize debts from federal benefits and wages of defaulting borrowers. The Washington Sun claims that the Trump administration had started implementing the involuntary collection process in 2025.
But the Treasury stepped in and blocked the efforts, before eventually pausing the policy, one of the sources told the Washington Sun.
