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Trump planning to hire private debt collectors to go after student loan defaulters after midterms: Report
Trump is reportedly planning to hire private debt collectors to pursue federal student loan defaulters after the midterms, possibly as soon as November.
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The Donald Trump administration is reportedly hatching a plan to hire private debt collectors to go after Americans who have defaulted on their federal student loans, the Washington Sun reported Monday.
A Reuters-Ipsos poll published on the same day showed that Trump's approval ahead of the midterm elections in November has fallen to a record low of 31%. Per the Washington Post, the sources say Trump's Treasury Department is set to implement the plan as soon as the midterm elections are over.
Three of the sources said to the outlet that the US Treasury Department is planning to hire private debt collectors "possibly as soon as November."
A July 2026 PBS report noted that one in every five federal loan recipients defaulted, with the total number of Americans defaulters standing around 9.5 million.
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The plans of the Trump administration to go after student loan defaulters are not new. On April 22, 2025, the Trump administration had announced that it would resume collecting pending federal student loans after the COVID-19 era pause. Measures like tax refund offset and wage garnishment were also announced by the White House.
Eventually, however, they backed off. In January 2025, as the midterms neared, the Trump administration paused involuntary collection of federal student debt, and the policy still stands as of October 2026.
What The Trump Administration Is Planning
The Washington Sun claims that the Trump administration had started implementing the involuntary collection process in 2025. The White House Office of Management and Budget even begun working with the Education Department to start a process to automatically seize debts from federal benefits and wages of defaulting borrowers. But the Treasury stepped in and blocked the efforts, before eventually pausing the policy, one of the sources told the Washington Sun.
Additionally, the sources cited in the report noted that the Treasury prefers bringing the borrowers on a plan where they could make payments voluntarily. Some in the Trump administration who wants the plan to take effect from the 2026-27 tax year ending on April 15, 2027. But there is a chance that it could be delayed again, the sources said.
“It’s definitely something they’re thinking about. It would be politically insane to do this before the midterms — but 2027 probably makes a little more sense to give Treasury time to get contracts signed, up and running,” one of the sources told the outlet.
