The U.S. Department of Education will soon start federal student loan collections for certain accounts on May 5. But what does this mean for Ohio?
Why the Department of Education will resume federal student loan collections
Federal student loan collections are currently on pause until May 5. The Biden-Harris administration refused to lift the pause in October 2023, after Congress mandated that student and parent borrowers should begin to repay their student loans.
According to the DOE press release, this act by the previous administration “failed to process applications for borrowers who applied for income-driven repayment and continued to push misguided ‘on-ramps’ and illegal loan forgiveness schemes to win points with borrowers and mask rising delinquency and default rates.”
The press release states that resuming student loan collections will “protect taxpayers.” Lifting the pause will also be accompanied by information to ensure borrowers understand how to resume repayment or exit default.
What does it mean for federal student loan borrowers?
On Monday, May 5, Federal Student Aid will restart its Treasury Offset Program, administered by the U.S. Department of the Treasury. If you’re a federal student loan borrower, you should receive an email about loan repayments over the next two weeks.
Borrowers will have to contact the Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
This campaign is meant to “restore commonsense and fairness” by urging student and parent borrowers to repay their loans. The department has also authorized guaranty agencies to begin involuntary collections activities for loans under the Federal Family Education Loan Program.
Ohio ranks ninth in the country for the most student debt
According to a 2024 study, Ohio takes the No. 9 spot for the states with the most student loan debt.
The ranking compared all 50 states’ average student loan debt along with the unemployment rate among 25 to 34-year-olds. Ohio is one of the top states that bear the burden of student debt.
Additionally, Ohio was No. 7 for the student debt-to-income ratio and in the top 20 for the proportion of students with debt and the average amount of student debt.
Nationally, 42.7 million borrowers owe more than $1.6 trillion in student debt, according to the DOE press release.
Roughly 5.3 million student loan borrowers in the U.S. are currently in default, according to PBS.
How much money does Ohio receive from the DOE?
According to an earlier estimate, the Department of Education’s budget for Ohio for fiscal year 2025 estimate is more than $5.65 billion, according to the DOE financial preview. In 2024, the funding estimate was over $5.48 billion. The 2025 estimate represents 3.08% of the DOE’s estimated $183.4 billion expenditure in 2025.
DOE’s most recent data for Ohio’s total funding is from the year 2023, with a total of nearly $5.25 billion. Ohio’s Department of Education and Workforce reports that Ohio has spent more on primary and secondary education than ever before, with $13.44 billion appropriated for 2025.
Trump pledges to eliminate the Department of Education
In March, the Trump Administration said it pledged to dismantle the Education Department.
Created by Congress in 1979, the U.S. Department of Education is a cabinet-level government department focused on promoting educational excellence, enhancing student achievement and readiness for global competition, and guaranteeing equal access for students of all ages, according to its website. Here’s why the Department of Education was established:
- Strengthen the federal commitment to equal educational opportunity for all people.
- Support states, local school systems, the private sector, educational institutions, research institutions, community organizations, parents, and students in improving education quality.
- Encourage public, parent and student involvement in federal education programs.
- Advance education quality through federal research and information sharing.
- Improve the coordination of federal education programs.
- Enhance management and efficiency of federal education activities by simplifying processes, reducing administrative burdens, and minimizing unnecessary paperwork for fund recipients.
- Increase the accountability of federal education programs to the president, Congress and the public.
- Funding to public schools serving millions of students.
- Manage college financial aid, Pell Grants, and oversee federal student loans.
This article originally appeared on The Columbus Dispatch: Some federal student loan collections resume May 5. More on Ohio impact
