Defaulted student loan borrowers will need to come up with a plan in the next few weeks as the Trump administration plans to restart involuntary collections for those who have missed payments. 

After five years, the Department of Education announced on Monday those in default, or those who have not paid on their loans for more than 270 days, could see financial consequences starting May 5 including blocked federal payments such as Social Security, and eventually even garnished wages. 

The changes are currently set to affect more than 5 million borrowers.

After they’ve missed payments on their loans for 90 days, a borrower is put into delinquency, and after 270 days, the loan becomes default.

After those first 90 days, missing student loan payments can affect credit scores, but going into default has more serious financial consequences, including hindering someone’s ability to get future loans.

But it’s the prospect of involuntary collections, including the garnishing of federal payments and eventually even private salaries, that is raising the most attention in the Trump administration’s announcement.

In a call with reporters, senior department officials reportedly said there will be a required 30-day notice to defaulted borrowers before wage garnishing would begin later this summer.

The government is able to garnish up to 15 percent of a person’s wages if they are in default.

The Education Department said it will contact those who are in default over the next two weeks to let them know of their status and options. Individuals can also check if they are in default at their studentaid.gov profile. 

The federal agency said more than 5 million borrowers are in default, and only 38 percent of borrowers are current on their student loans. 

The program to put default borrowers into involuntary collections has been used for decades but was put on a years-long pause back in March 2020, at the start of the COVID-19 pandemic.

“This is a continuation of returning to what I would call normalcy of repayment for the federal student loan program. … This is nothing new. I mean, the program has been around for federal student loans since 1986,” said Jack Wallace, a loan expert. 

Borrowers in default have a few different options, and the Office of Federal Student Aid will be reaching out to those who are struggling in the upcoming weeks to lay out those details. 

Borrowers can get on an income-driven repayment (IDR) plan or sign up for loan rehabilitation. 

Loan rehabilitation, which can only be done once, is handled through a loan servicer; once a person repays for nine months straight, they are taken out of default.

“We recommend folks call their servicer. If they don’t know where to start, they can look for groups like Student Debt Crisis Center (SDCC) who can provide that information as well,” said Sabrina Calazans, executive director of SDCC.  

If a borrower is in delinquency but not yet default, they can ask their loan servicer for a year of forbearance, meaning they wouldn’t have to pay the principal amount on the loan, although interest will continue to accrue during this time. 

The announcement comes after the Department of Education took down applications for IDR plans for around a month after a court ruled against former President Biden’s Saving on Valuable Education Plan.

The applications came back at the end of March, but some say that is not enough time before threats of garnishing wages.

“It doesn’t feel like borrowers were given a chance to get into the correct programs if they happen to have been in default … and have that squared away prior to garnishment starting,” said Natalia Abrams, founder and president of SDCC. 

In the less than two weeks until defaulted borrowers will be held responsible for their loans, experts say it is important to understand their situation and make a financial plan.

“My advice is always get organized. Know your loan type, your servicer, your repayment options. Don’t wait for the government to inform you,” said Aron Boxer, founder and CEO of Diversified Education Services. 

“I’m telling people, if they need, look into income-driven repayment plans, explore refinancing if they need to. … It really depends on their unique situation. But start budgeting as if the payments have already started,” he added. 

The Department of Education is making it clear all communication on this issue will be focused on the borrower repaying the loan — with no Biden-era forgiveness on the horizon.

“FSA [Federal Student Aid] 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 said. 

“There will not be any mass loan forgiveness. Together, these actions will move the federal student loan portfolio back into repayment, which benefits borrowers and taxpayers alike,” it added. 

The message is a complete 180 from Biden, who spent his presidency trying to give partial universal student debt relief and to create an IDR plan that allowed some borrowers to pay as little as $0 a month.

Trump critics say the abrupt change is ill-timed as Americans are already grappling with economic uncertainty and market upheaval amid the president’s trade wars.

“The impacts that we’ve been seeing with the overall economy … borrowers and just Americans in general feel incredibly strapped,” said Abrams.