President Donald Trump’s Department of Education announced on Monday that the Office of Federal Student Aid (FSA) will be resuming student loan payments next month in a major reversal from former President Joe Biden’s administration.
In a Monday press release, the U.S. Department of Education confirmed that student loan payments will restart on May 5 following a student loan payment pause that was issued in March of 2020 during the COVID-19 pandemic.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” U.S. Secretary of Education Linda McMahon said. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear. Hundreds of billions have already been transferred to taxpayers.”
McMahon explained that under the Trump administration, the Department of Education and the Department of Treasury will “shepherd the student loan program responsibly and according to the law” by helping millions of student borrowers restart loan payments “both for the sake of their own financial health and our nation’s economic outlook.”
According to Monday’s press release, roughly 42.7 million borrowers currently owe over $1.6 trillion in student debt to the federal government. The Department of Education warned that the Biden administration put American taxpayers “on the hook for irresponsible lending” through various student debt forgiveness programs, which resulted in “pushing the federal student loan portfolio toward a fiscal cliff.”
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The Department of Education noted on Monday that over 5 million student loan borrowers have not submitted a monthly payment for over 360 days and currently “sit in default,” while 4 million borrowers are in “late-stage delinquency.” The department warned that nearly 10 million borrowers could be in default over the next few months.
Additionally, the Department of Education announced that only 38% of student loan borrowers are “in repayment and current” on their student loan payments.
“Over the next two months, [Office of Federal Student Aid] will conduct a robust communications campaign to engage all borrowers on the importance of repayment,” the Department of Education said. “FSA will conduct outreach to borrowers through emails and social media reminding them of their obligations and providing resources and support to assist them in selecting the best repayment plan.”
“FSA intends to enlist its partners – states, institutions of higher education, financial aid administrators, college access and success organizations, third-party servicers, and other stakeholders – to assist in this campaign to restore commonsense and fairness with the message: student and parent borrowers – not taxpayers – must repay their student loans,” the department added. “There will not be any mass loan forgiveness.”
