Benefits could be withheld from 5.3 million defaulted student loan borrowers, feds say

You default on a student loan when you don’t make a payment for 270 days. That’s about nine months. This gap can lead to serious financial trouble.

More than five million student loan borrowers who are behind on payments could face serious benefit consequences by the end of the summer.

The U.S. Department of Education announced on Monday, May 5, that big changes are coming for defaulted borrowers. By the end of summer, 5.3 million people who defaulted on student loans will receive a 30-day warning from the U.S. Department of the Treasury.

Through these notices, borrowers will learn that they may lose access to federal benefits. So far, about 195,000 borrowers have already received this warning.

According to the statement, the first benefit checks affected will be those scheduled for early June. As a result, borrowers should act quickly to avoid delays or a possible loss of benefits.

In a late April post on X, Education Secretary Linda McMahon strongly rejected the idea of student loan forgiveness. According to her, it doesn’t erase debt—it simply shifts the burden to someone else.

Furthermore, she argued that taxpayers shouldn’t pay for loans they didn’t take out. Instead, she believes borrowers must take full responsibility for what they owe.

Ultimately, she made her stance clear: “Borrowers should pay back the debts they take on.”

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