By Edition8 News Staff
May 5, 2025
As of May 5, 2025, the U.S. government's five-year student loan repayment pause has officially ended, marking a significant shift for millions of borrowers. Initiated in March 2020 to alleviate financial strain during the COVID-19 pandemic, the pause suspended payments and halted interest accrual. The extension of this relief, known as the "Fresh Start" program, concluded in 2025, leading to the resumption of debt collection efforts.
Approximately 5 million borrowers are currently in default, with an additional 4 million in late-stage delinquency. The Department of Education has warned that failure to resume payments could result in wage garnishment, tax refund seizures, and reduced Social Security benefits under the Treasury Offset Program. Notices for wage garnishment are expected to be issued later this summer .
For borrowers seeking to exit default, options include loan rehabilitation, consolidation, or enrolling in income-driven repayment (IDR) plans. However, legal challenges have temporarily blocked forgiveness under certain IDR plans, including the SAVE, ICR, and PAYE plans. The Income-Based Repayment (IBR) plan remains unaffected and continues to offer forgiveness after 20 or 25 years of qualifying payments .
It is crucial for borrowers to stay informed about their repayment options and to take proactive steps to avoid default. Updating contact information with loan servicers and exploring available repayment plans can help manage the transition back into repayment.
