Student Loan Collections Set To Begin In May, Here’s What New Yorkers Can Do

If you have defaulted on your student loans the Department of Education is coming to collect. Starting May 5, 2025, if you have defaulted on your student loan, it is possible for the government to seize your tax refund, withhold social security payments and even garnish your wages.

As of today approximately 5.2 million borrowers are considered in default of their student loan payments. Here are some of the steps New Yorkers can take.

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If you are a borrower in default, expect to receive an email from Federal Student Aid. (FSA) You will be encouraged to connect with the Default Resolution Group to explore your options. You may be eligible for monthly payments, an income-driven repayment plan or loan rehab.

If you choose to take no action you will begin to receive notices this summer regarding administrative wage garnishment. These FSA collections can only be conducted after sufficient notice has been provided and you have the opportunity to repay the loan.

The good news is that you have several options to get out of default of your student loan debt. Some of your options are repaying your loan in full, rehab your loan or consolidate your loan. Each of these options have their pros and cons.

• Rehab your loan - Start by contacting your loan holder.
• Consolidate your loan - Possibly with an income-driven repayment plan
• To explore these options and more visit FSA