Pace students near Alumni Hall on the Pace Westchester campus

Resources for Federal Student Loan Repayment and Default Prevention

Important Update on Federal Student Loan Collections

Beginning Monday, May 5, 2025, the U.S. Department of Education, through the Office of Federal Student Aid (FSA) will resume collection on federal student loans that are in default. These collection efforts may include wage garnishment and other automatic methods of repayment.

These efforts are part of a nationwide initiative to resume regular student loan repayment and specifically target borrowers with loans currently in default.

Pace University is committed to supporting our students and alumni. If you are impacted, we encourage you to explore the support and resources available to you.

Note: If your loans are in good standing, fully paid off, or have been discharged, this update does not apply to your situation.

What To Know as Repayment Resumes

As federal student loan repayment resumes, the U.S. Department of Education is launching a nationwide outreach effort to guide borrowers through the next steps, especially borrowers with loans in default. It is essential to log in to the Federal Student Aid website to review the status of your outstanding federal student loans and obtain information about your lender and repayment options. If your federal student loans are in a default status, you should visit the Debt Resolution Federal Student Aid webpage to help you understand your options and take action to begin the loan rehabilitation process.

Resources

The Office of Federal Student Aid's (FSA) Repaying Your Loans Booklet - This resource outlines the information related to the repayment of federal Direct Loans, Perkins Loans, and FFEL loans.
Repaying Student Loans for the First Time - This page provides helpful information for student loan borrowers who will be making payments for the first time since the COVID-19 pandemic-related pause.
Income-Driven Repayment (IDR) Plans - Learn more about the four available IDR plans that determine your monthly student loan payment based on your income and family size.
Student Loan Deferment and Forbearance - Deferment and forbearance are options that allow borrowers in short-term financial distress to temporarily stop making payments.
Public Service Loan Forgiveness (PSLF) - The PSLF program is for borrowers working in public service who are employed by qualifying employers and meet the criteria to receive forgiveness
Student Loan Delinquency and Default - Federal student loans become delinquent when a borrower misses a payment. A loan may go into default if the borrower does not make a payment in a certain amount of time. FSA outlines delinquency/default and actions borrowers can take if they believe their loans were mistakenly put in default.

Stay Alert to Avoid Student Loan Scams

Created by the National Association of Student Financial Aid Administrators (NASFAA)

Frequently Asked Questions

Visit the Federal Student Aid website and log in to your account dashboard. Your loan status will be displayed there. This is the official portal for managing federal student aid.
A loan is considered in default if payments haven’t been made for over 270 days, in violation of the agreement outlined in your loan’s promissory note. Collections on defaulted loans have been paused since March 2020, but the Department of Education announced plans to resume collections on May 5, 2025.
Visit the Debt Resolution Federal Student Aid webpage for more information regarding your options and how to begin the loan rehabilitation process.
Wage garnishment allows up to 15% of your disposable income to be withheld directly from your paycheck if your loan is in default. This process can begin as early as Summer 2025 if no action is taken. To prevent this, check your loan status and explore options on the Federal Student Aid website.
Use the Loan Simulator on the Federal Student Loan website to compare monthly payments and plan features side by side. This tool helps you identify which repayment plan fits your financial goals.
Federal student loan forgiveness through plans like SAVE (formerly REPAYE), PAYE, and ICR is currently paused due to ongoing legal proceedings. However, forgiveness under the Income-Based Repayment (IBR) plan is still being processed. Payments made under the paused plans may still count toward forgiveness under IBR if you switch. For updates, visit the Federal Student Aid court action page.