Starting May 5, the U.S. Department of Education will resume collections on defaulted federal student loans, ending a five-year pause that began during the pandemic. For over 5 million borrowers already in default, and another 4 million in late-stage delinquency, wage garnishments, tax refund seizures, and even Social Security offsets could begin as early as this summer.
This isn’t just another policy shift—it’s a direct attack on working families, especially educators. Women, who hold nearly two-thirds of the nation’s $1.6 trillion in student debt, will bear the brunt. Black women, facing both the highest average debt and persistent wage gaps, stand to lose the most.
The Trump Administration claims this is about restoring fiscal responsibility. But critics see it as forcing millions into financial distress while blocking pathways to manageable repayment. Earlier this year, the administration halted access to income-driven repayment (IDR) plans for many borrowers, only reinstating them after legal pressure from advocates, including the American Federation of Teachers.
With nearly 10 million borrowers projected to fall into default in the coming months, this decision will deepen economic instability for those already struggling — like Texas educators balancing low wages and rising living costs. We know student debt isn’t just a line item, it’s what keeps educators from buying homes, starting families, or retiring with dignity.
While the Department of Education has promised outreach and resources, many borrowers are still navigating confusing systems, delayed processing, and rising monthly payments. The reality is that aggressive collections won’t solve the root issue – the crushing weight of student debt in a system that underpays those who serve our communities.
Our union will keep following policy developments on the federal student loan landscape closely. In the meantime, we encourage members to sign up for upcoming AFT student debt clinics to get the latest information and resources to manage the chaos and uncertainty. Find an upcoming clinic and RSVP here.