Business

Student Loan Collections Have Resumed: Here’s What You Need to Know

According to the DOE, 42.7 million borrowers owe more than $1.6 trillion in student debt. More than 5 million borrowers have not made a monthly payment in over 360 days and their loans have been declared “in default.” Another 4 million borrowers are in late-stage delinquency (91-180 days). As a result, there could be almost 10 million borrowers in default in a few months. If this happens, almost 25% of the federal student loan portfolio will be in default.

Published

10 months ago

May 19, 2025

Oakland Post

iStock.

By Edward Henderson, California Black Media

The U.S. Department of Education (DOE) announced that its Office of Federal Student Aid (FSA) resumed collection of its defaulted federal student loan portfolio on May 5.

The department has not collected on defaulted loans since March 2020.

‘Collections on defaulted federal student loans are resuming. This means that your tax refund or other federal benefits may be withheld,” reads an email affected borrowers in California and around the country received from the DOE last week.

“Later this summer, your employer may also be required to withhold a portion of your pay until you begin to repay your defaulted federal student loan,” the email continues.

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said U.S. Secretary of Education Linda McMahon in a release.

The DOE is urging borrowers in default to contact the Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation. Later this summer, FSA will send required notices to begin administrative wage garnishment.

Student loan debt statistics among racial and ethnic groups reflect dramatic differences in financial health, habits, and resource availability from one community to the next, according to the Education Data Initiative.

Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates (Black and African American bachelor’s degree holders have an average of $52,726 in student loan debt).

“The level of concern here really depends on the reasons a borrower has not paid their federal student loans. If they don’t have the capacity, they may be overstretched,” Michele Raneri, vice president and head of research at TransUnion, said in a statement. “They may not know they have to pay them, may not be able to find the information on how to do so, or may not have a willingness to pay for one reason or another,” she said.

Top tips to manage any pending student loan payments include reviewing your student loan balance on your Dashboard.

Affected borrowers can visit their loan servicer’s website for assistance if needed. Setting up auto pay to ensure on-time payments is recommended. Individuals are also encouraged to review many loan forgiveness options and qualifications.

Most programs have strict eligibility requirements, but student loans can be forgiven under programs such as the following:

Public Service Loan Forgiveness for people who work for eligible government and nonprofit employers
Teacher Loan Forgiveness for people who work in eligible teaching jobs
Income-driven repayment (IDR) forgiveness for people who repay their loans on an eligible IDR plan
Total and permanent disability discharge for people with a disability that severely limits their ability to work

Learn about other loan forgiveness programs at Studentaid.gov.

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Oakland Post: Week of March 18 – 24, 2026

The printed Weekly Edition of the Oakland Post: Week of March 18 – 24, 2026

Published

4 days ago

March 22, 2026

Oakland Post

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Advice

Financial Wellness and Mental Health: Managing Money Stress in College 

While everyone’s financial situation is unique, several common sources of stress have the potential to strain your financial health. These include financial and economic uncertainty, existing debts, unexpected expenses, and mental or physical health changes. Financial stress may differ from situation to situation, but understanding the factors contributing to yours may help you begin to craft a plan for your unique circumstances.

Published

1 week ago

March 17, 2026

Oakland Post

Sponsored by JPMorganChase

As a college student, managing financial responsibilities can be stressful.

If you’ve found yourself staying up late thinking about your finances or just feeling anxious overall about your financial future, you’re not alone. In one survey, 78% of college students who reported financial stress had negative impacts on their mental health, and 59% considered dropping out. While finances can impact overall stress, taking steps to manage your finances can support your mental, emotional and physical well-being.

When it comes to money, the sources of stress may look different for each student, but identifying the underlying causes and setting goals accordingly may help you feel more confident about your financial future.

Consider these strategies to help improve your financial wellness and reduce stress.

Understand what causes financial stress

2. Determine your financial priorities

Start by reflecting on your financial priorities. For students this often includes paying for school or paying off student loans, studying abroad, saving for spring break, building an emergency fund, paying down credit card debt or buying a car. Name the milestones that are most important to you, and plan accordingly.

3. Create a plan and stick to it

While setting actionable goals starts you on the journey to better financial health, it’s essential to craft a plan to follow through. Identifying and committing to a savings plan may give you a greater sense of control over your finances, which may help reduce your stress. Creating and sticking to a budget allows you to better track where your money is going so you may spend less and save more.

4. Pay down debt

Many students have some form of debt and want to make progress toward reducing their debt obligations. One option is the debt avalanche method, which focuses on paying off your debt with the highest interest rate first, then moving on to the debt with the next-highest interest rate. Another is the debt snowball method, which builds momentum by paying off your smallest debt balance, and then working your way up to the largest amounts.

5. Build your financial resilience

Some financial stress may be inevitable, but building financial resilience may allow you to overcome obstacles more easily. The more you learn about managing your money, for instance, the more prepared you’ll feel if the unexpected happens. Growing your emergency savings also may increase resilience since you’ll be more financially prepared to cover unexpected expenses or pay your living expenses.

6. Seek help and support

Many colleges have resources to help students experiencing financial stress, like financial literacy courses or funds that provide some assistance for students in need. Talk to your admissions counselor or advisor about your concerns, and they can direct you to sources of support. Your school’s counseling center can also be a great resource for mental health assistance if you’re struggling with financial stress.

The bottom line

Financial stress can affect college students’ health and wellbeing, but it doesn’t have to derail your dreams. Setting smart financial goals and developing simple plans to achieve them may help ease your stress. Revisit and adjust your plan as needed to ensure it continues to work for you, and seek additional support on campus as needed to help keep you on track.

 JPMorgan Chase Bank, N.A. Member FDIC