Daijiworld Media Network - Washington

Washington, Oct 20: The Donald Trump administration is reportedly considering hiring private debt collection agencies to pursue Americans who have defaulted on their federal student loans, with the move potentially taking effect after the November midterm elections, according to a report by the Washington Sun.

Three sources cited in the report said the US Treasury Department was considering hiring private debt collectors, possibly as early as November. However, the plan could be delayed as the administration weighs its implementation.

The reported proposal comes as a Reuters-Ipsos poll published on Monday put Trump's approval rating at 31%, a record low, ahead of the midterm elections.

A PBS report in July 2026 said around 9.5 million Americans had defaulted on their federal student loans, representing approximately one in five federal student loan borrowers.

The administration's efforts to resume compulsory student loan collections date back to April 2025, when it announced plans to restart collections following the pause introduced during the Covid-19 pandemic. Measures such as withholding tax refunds and garnishing wages were also announced.

However, involuntary collection measures were subsequently put on hold, and the reported plan to resume them remains under consideration as of October 2026.

According to the Washington Sun, the White House Office of Management and Budget had previously worked with the Education Department on plans to recover defaulted debt through deductions from wages and federal benefits. The Treasury Department reportedly intervened and blocked those efforts before the policy was paused.

Sources cited in the report said the Treasury preferred encouraging borrowers to enter repayment plans and make payments voluntarily rather than immediately resorting to compulsory collection.

Some officials are reportedly considering implementing the plan during the 2026-27 tax year, which ends on April 15, 2027. However, the timeline remains uncertain, with the possibility of another delay.