UNIVERSITY PARK, Pa. — The U.S. Department of Education has issued new guidance encouraging colleges and universities to increase outreach to former students with federal student loans, particularly those who may be at risk of default. As part of this effort, the University would like to remind borrowers that they are obligated to repay any federal student loans that have not been repaid and are not in deferment or forbearance.
Following the multi-year pause on payments due to the COVID-19 pandemic, federal student loan repayment officially resumed in October 2023. Now, the Department of Education is moving forward with enforcement actions for borrowers who remain in default. The government has begun collecting on defaulted loans through the Treasury Offset Program, which may redirect tax refunds and other federal payments to cover past-due balances.
Borrowers who have not yet resumed payments or are unsure of their loan status should take immediate steps to review their accounts. Log in to StudentAid.gov to verify your loan status, update contact information and explore available repayment options. Programs such as income-driven repayment plans, deferment, forbearance, or loan consolidation may provide relief, depending on individual circumstances.
Ignoring student loan obligations can lead to more than just financial consequences — default can negatively impact credit scores and make future borrowing or financial aid more difficult. However, proactive steps taken now may assist your standing on loan repayment obligations.
Students and alumni in need of professional financial literacy information can schedule a virtual or in-person one-on-one coaching session or access webinars and self-study modules at the Sokolov-Miller Family Financial and Live Skills Center.
Students who are feeling stressed or overwhelmed about loan repayment can contact Counseling and Psychological Services (CAPS) for mental health support. Crisis support is accessible 24/7 by calling 1-877-229-6400, or by texting "LIONS" to 741741.
For additional guidance, updates and Penn State-specific resources, visit Penn State Student Aid.