Key Points
- Collection activity on defaulted student loans will resume on May 5, 2025.
- There's confusion about whether the SAVE forbearance or administrative forbearance is considered default.
- Borrowers are reporting struggles to get through to their loan servicers or even login to websites to check their loans.
The Department of Education announced on Monday that collection activity on defaulted student loans would resume on May 5, 2025. Along with that announcement, the said that 5 million student loan borrowers are currently in default, and another 4.5 million are delinquent on their loans.
This has shocked a lot of student loan borrowers who may be confused on what student loan default even means. Specifically, student loan default occurs when a borrower hasn't made a complete required payment on their student loans in 270 days.
Quick summary of common situations we've been getting from readers and viewers this week:
- Save Forbearance: Not Default
- Processing Forbearance: Not Default
- Administrative Forbearance: Not Default
- In-School Deferment: Not Default
- $0 IBR/PAYE/ICR Payment: Not Default
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What Is Considered Student Loan Default?
We've covered the common questions we're seeing that aren't student loan default, so what is? Any borrower who has a required payment but has not made a full payment in 270 or more days.
Borrowers that have been required to make a payment since the payment pause ended in September 2023, but haven't. Remember, the Covid pause ended in September 2023, but President Biden allowed a grace period where no negative credit reporting or collections would happen for one year. That doesn't mean your payments weren't due, it's just that they weren't sending you to collections or dinging your credit score.
So, that got you to October 2024, and then loan servicers report late payments to the credit bureaus when they're 90 days late. So, that was through January, and the first people got negatively impacted in February and March, depending on the billing cycle. Remember seeing borrowers lose 100-200 points on their credit reports?
So, now we're here today, approaching May 5, 2025.
If you're a borrower who is required to make a payment: those in the standard, extended, graduated plan, or those that are in an active IDR plan like IBR, PAYE, or ICR. There's also many graduates who may have left college between 2020 and 2024 and need to select their first repayment plan.
Finally, remember it has to be a full payment. If your required payment is $100, but you only paid $50, that's not a full payment and that's still considered delinquent. If you do this for 9 months, you will still end up in default.
Related: Student Loan Debt Statistics
How Do You Check Your Loan Status?
You need to login to your loan servicer and check your loan status. Remember, all of the loan servicer portals have migrated to StudentAid.gov. And we're seeing a lot of borrower confusion on this. Here are the main portals:
MOHELA - https://mohela.studentaid.gov/
NELNET - https://nelnet.studentaid.gov/
AIDVANTAGE - https://aidvantage.studentaid.gov/
EDFINANCIAL - https://edfinancial.studentaid.gov/
CRI - https://cri.studentaid.gov/
Once you login, you can check your loan status. If your loan has a past due payment date, you're delinquent. If you're in default already, it will say default.
If you already know you're in default, you want to contact the Default Resolution Group directly here: https://myeddebt.ed.gov/
Related: Student Loan Debt Collectors
How Do You Get Out Of Default
Ok, so you're in delinquency first. If that's you, simply paying the amount due will get you current. Check your current loan statement and see what you owe, and pay it.
If that doesn't work because you cannot afford it, you can see if you can change your repayment plan, or go into a hardship forbearance until you can resolve your budget issues.
If you're already in default, you have three main courses of action: consolidation, rehabilitation, paying in full (though this one likely isn't an option).
There are pros and cons to each option, and we have a full guide: How To Get Out Of Student Loan Default.
Final Thoughts
The upcoming end of the student loan collection pause was expected. It's been five years since payments were paused, it's been over a year since payments have resumed, it was only a matter of time before collection activity resumes.
It may sound shocking that 9-10 million borrowers may be in delinquency or default, but pre-pandemic, the student loan portfolio was averaging 7 million borrowers in delinquency or default at any given time.
The bottom line is that collections are returning, and borrowers need to get out of default and into a repayment plan.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.