Savi Town Hall: Collections to Resume on Defaulted Student Loans

The Department of Education announced that collections on student loans will resume on May 5, 2025, for the first time in five years. More than 5 million borrowers are in default, and 4 million borrowers are in late-stage delinquency. This means if borrowers don't take action, almost 25% of the federal student loan portfolio will eventually be in default.

Student loan default has serious consequences, including employer wage garnishment, tax refund seizure, social security offset, or damage to credit scores. Employers will start receiving letters from the government requiring them to garnish up to 15% of employees' paychecks.

What this means for borrowers:

• Over the next few weeks, the Department of Education will begin notifying borrowers impacted by collections. Borrowers in default will face penalties, including up to 15% of wages withheld from every paycheck.
• Savi has notified existing users of this news and shared key steps they should be taking to ensure they can avoid the negative impacts of collections.

Please join the Savi Town Hall: What You Need to Know About Collections on Defaulted Loans on Wednesday, April 30, for a live session and Q+A with student loan experts to learn more about collections resuming.

Visit Tuition Programs for more information about Student Debt Solutions with Savi.