Treasury Reportedly Prepares to Hire Student Debt Collectors

The U.S. Treasury Department is reportedly preparing to hire private debt collectors to pursue borrowers in default on federal student loans, but the administration has not set a date for restarting involuntary collections. If the plan proceeds, borrowers could face wage garnishment or the withholding of eligible federal payments, including tax refunds. The reported preparations include hiring collectors as soon as November 2026. That timing does not mean collections would begin then: officials are said to be considering when to resume them, and the timetable could slip. Some reportedly favor action for the tax year ending with the April 15, 2027, filing deadline, while others want the Treasury’s Defaulted Loans Support Center operating first. The plans and internal discussions come from accounts attributed to people familiar with them, rather than an announced government decision. The Education Department dismissed the report, while Treasury and the White House budget office declined to comment, according to the accounts. The departments have not confirmed a restart date. In January, the Education Department announced a temporary delay in involuntary collections, including...