The U.S. Department of Education (ED) has temporarily paused involuntary collections on federal student loans, including wage garnishment and tax refund seizures. This pause gives borrowers more time to explore options and get back on track.
It is important to note that this pause is temporary. ED may resume these collection tactics in the future, so now is the time to act.
If your federal student loans are more than 270 days past due, they are considered in default. While ED will not garnish your wages or seize your tax refund during this pause, ED continues to report defaults to credit bureaus which can negatively impact your credit.
What Can You Do?
You have options to resolve your default and avoid future collections. Borrowers should explore paths out of default on ED’s website and learn more by viewing a webinar from the DC Student Loan Ombudsman here. Borrowers in the SAVE forbearance should note that they are not delinquent or in default but should prepare to choose a new repayment plan soon.
Tip: Update your contact information with ED and your loan servicer to avoid missing critical notices.
How do I know if I am delinquent or in default?
Check studentaid.gov but note that some DC borrowers report incorrect delinquency/default statuses. Always confirm by phone or contact DISB for help.
Call your servicer for confirmation.
Avoiding Default
- Request a retroactive forbearance to cancel past-due amounts and restore good standing.
- Apply an Income-Driven Repayment (IDR) plan at studentaid.gov/idr or by contacting your servicer.
Pay your past-due balance if possible.
Steps to Get Out of Default
Loan Rehabilitation: Enter a written agreement and make nine on-time payments.
Loan Consolidation: Combine defaulted loans into a new Direct Consolidation Loan. Note: this may affect PSLF and IDR forgiveness progress.
Rights and Protections
Check for Discharge Eligibility: You may qualify for discharge due to total and permanent disability, school misconduct, or school closure.
Legal Protections: District law guarantees your right to accurate, timely, and complete information from your student loan servicers. Servicers must respond to written inquiries within 30 days and cannot furnish inaccurate credit data.
Support for DC Residents
The DISB Student Loan Ombudsman provides free assistance to District residents. If you have concerns regarding your student loans, you can file a complaint here or you can reach out to the DISB Student Loan Ombudsman at 202.727.8000 or [email protected].
DISB Mission
Our mission is three-fold: (1) cultivate a regulatory environment that protects consumers and attracts and retains financial services firms to the District; (2) empower and educate residents on financial matters; and (3) provide financing for District small businesses.