Treasury Set To Ramp Up Defaulted Student Loan Collections In July

Hundreds of thousands of federal student loan borrowers in default could start hearing from the government and their debt collectors as soon as July, as the Treasury Department prepares to take over a piece of the Education Department's collection work, Politico reported.

Why It Matters: This would be the first major step in moving the $1.7 trillion federal student loan portfolio out of the Education Department and the first sustained collection contact most defaulted borrowers have received since the Covid-era payment pause began in March 2020. Collections have been delayed various times since that paused ended in 2023.