As early as May 5, 2025, U.S. Department of Education will restart involuntary collections on defaulted federal student loans
Update on 4/28/2025: When borrowers default on their federal student loans, the U.S. Department of Education can collect the outstanding balance through forced collections, including taking your tax refund, Social Security benefits and wages. At the beginning of the COVID-19 pandemic, the Department of Education paused collections on defaulted federal student loans. Now, collections are set to resume and millions of borrowers with federal student loans in default will be affected.
At this time it’s important to know if you have any federal student loans and find out if they are in default or not. You can do this by going to the StudentAid.gov website. While you are there, update the contact information in your account so you can get notices and information about your loans.
If you are in default, look at ways to get out of default. Explore repayment options — including income-driven repayment (IDR) plans which are based on how much money you make. Also read up on loan cancellaton and forgiveness options. Ask your loan servicer about options to stop collections before they start. They can help you at no charge.
How do I know what kind of loan I have?
It may be hard to tell at first glance if you have a private or a federal loan. Many private student loan lenders also manage and service federal student loans. You may have both federal and private student loans.
To find out, visit this page of the Student Loan Borrower Assistance website.
Federal student loans
Having trouble repaying your federal student loan? Explore repayment options — including income-driven repayment (IDR) plans based on how much money you make.
You don’t have to pay to get help with loan services such as consolidating your federal student loans or applying for an income-driven repayment plan. If you are contacted by a company asking you to pay “enrollment,” “subscription” or “maintenance” fees to enroll you in a repayment plan or forgiveness program, you should walk away. These services and more can be done by your loan servicer for free!
Student loan forgiveness plan was blocked
On August 24, 2022, the U.S. Department of Education announced student loan forgiveness of up to $20,000 for eligible Americans. On June 30, 2023, the U.S. Supreme Court issued a ruling that essentially blocks this student debt relief program. The U.S. Department of Education has information on loan forgiveness on the Federal Student Aid website.
Private student loans
If you have a private student loan — including one from Vermont Student Assistance Corporation (VSAC) — contact your student loan servicer or lender to identify the options that might help you. They may include:
- providing forbearance (postponement) of payments
- waiving late-payment fees
- protecting you from negative credit reporting
- ceasing debt-collection lawsuits for some time, and
- enrolling in appropriate assistance programs, such as income-based repayment.
Borrowers with private student loans can look for contact information on their monthly billing statements. VSAC borrowers may call 1-833-802-8722.
Learn more about repaying private student loans on the Student Loan Borrower Assistance website.
General student loan resources
- Watch out for student debt relief scams!
- Managing Student Loans - Student Loan Borrower Assistance website
- Discharging a Student Loan Due to Disability - Student Loan Borrower Assistance website
- Other reasons to discharge a federal loan - Student Loan Borrower Assistance website
- Getting or Repaying Student Loans - Consumer Financial Protection Bureau website
- Studentloanify - A paid online service that helps you find and apply for the best repayment option available to you
- Finding Your Student Loan Information - Student Loan Borrower Assistance website
Need help?
If you have a low income and you are having trouble with your federal student loan payments, contact us. Fill out our form and we will call you back. Your information will be sent to Legal Services Vermont, which screens requests for help for both Vermont Legal Aid and Legal Services Vermont. You can also call us at 1-800-889-2047.
