After the federal government suspended student loan repayment for four and a half years, payments are finally due again—yet less than half of borrowers are repaying their debts on time. These high rates of student loan nonpayment threaten to ruin many borrowers’ credit records and send millions into default. Low student loan receipts could also cost taxpayers tens of billions per year.
There are many factors behind the nonpayment crisis, but among the most important is a lack of awareness. After years of deferred payments and false starts, many borrowers do not even know that loan payments are due again. The Biden administration, still hoping to push through its doomed loan-cancellation schemes, made little effort to alert borrowers to the end of the pause in October 2024. Biden’s team also discouraged loan servicers from keeping in contact with borrowers during the pause; servicers have thus lost touch with millions.
The Trump administration now has the opportunity—and the responsibility—to clean up Biden’s mess. While fixing the student loan system’s problems will require an extended government effort, and likely action by Congress, Education Secretary Linda McMahon can take two actions right now to raise borrowers’ awareness about their loan obligations.
Contact borrowers directly
In 2024, then-Education Secretary Miguel Cardona blasted out emails to 40 million federal student loan borrowers that touted the Biden administration’s (ultimately unsuccessful) loan forgiveness plans. Another mass email lambasted “Republican elected officials… siding with special interests” for opposing him. Cardona’s critics claimed this partisan use of official communications channels violated federal law. Rather than political attacks, the Trump administration could utilize those same communication channels for useful ends.
Secretary McMahon ought to email every borrower on that list with a reminder that student loan payments have resumed. The message should warn that borrowers who miss payments could face consequences such as lower credit scores, wage garnishment, and seizure of tax refunds. The email would include information about how borrowers can get in touch with their loan servicer to start payments and the available repayment plans.
Enlist colleges to help
Federal regulations require colleges which use federal student loans to “provide timely and accurate information to the Secretary for the servicing and collecting of loans… concerning any new information of which the school becomes aware for these students… after the student leaves school.” In addition, colleges where a high percentage of borrowers default on their student loans after leaving school can have their eligibility for federal student aid programs revoked.
Secretary McMahon could send a “Dear Colleague Letter” to all institutions participating in the federal student loan program, reminding college leaders of these facts. The letter could request that colleges remind recent alumni of their federal student loan obligations and ask institutions to furnish the Secretary with current contact information for those borrowers.
As an added flourish, McMahon could direct the Office of Federal Student Aid to calculate the percentage of recent borrowers from each college who are currently in a nonpayment status. Colleges closer to the threshold at which they could lose aid eligibility should be especially eager to help the government fix the nonpayment crisis.
Next steps
Returning student loan repayment to pre-pandemic rates will require more than emails and letters, of course. Congress may need to appropriate more funding for student loan servicing and create extra incentives for borrowers to re-engage with the student loan system. But Secretary McMahon has tools at her disposal to get the ball rolling.