TRENTON, N.J. — The U.S. Department of Education will resume collection efforts on defaulted federal student loans starting May 5, Secretary of Education Linda McMahon announced Monday, signaling a policy shift affecting more than a million borrowers in New Jersey.
New Jersey residents collectively hold $45.3 billion in federal student loan debt, averaging $37,201 per borrower, according to Education Department data. Approximately 1,217,700 borrowers — or 13.1% of the state’s population — carry federal student debt.
Key Points:
- Federal collections on defaulted student loans resume May 5
- NJ borrowers owe a combined $45.3 billion in federal student debt
- Secretary McMahon: “There’s no such thing as forgiveness, just shifting the burden”
McMahon: ‘Borrowers should pay back the debts they take on’
In a statement released on social media, Secretary McMahon emphasized the administration’s stance against loan forgiveness policies supported by the previous administration.
“The federal student loan portfolio stands at nearly $1.7 trillion, and only 4 in 10 student borrowers are in repayment,” McMahon said. “We will not force American taxpayers to take on the debts that are not theirs. Borrowers should pay back the debts they take on.”
McMahon criticized past efforts to cancel student debt as “illegal” and “false promises,” reinforcing a renewed focus on repayment compliance.
Repayment resources available for defaulted borrowers
With the end of the collection pause, borrowers in default may face wage garnishment, tax refund interception, and other enforcement measures unless they take action. The Education Department is encouraging borrowers to visit studentaid.gov to explore repayment plans, consolidation options, and resources to exit default.
Borrowers who enroll in income-driven repayment plans or take steps to rehabilitate their loans may avoid punitive collection actions.
