In default? You have two ways out — and one is probably better for you.

Collections on defaulted federal loans restarted in 2025 — tax refunds and federal benefits were seized, with wage garnishment announced — then the Department of Education paused involuntary collections in January 2026 while it rolls out the new repayment plans. That pause is expected to lift around July 2026. Rehabilitation takes 10 months, so the time to start is now, during the pause. What most borrowers in default are never told: two federal programs exist specifically to get you out — rehabilitation and consolidation. Both are free. Neither requires paying the full balance.