The U.S. government resumed collections on defaulted federal student loans this month for the first time in over five years - restarting a revenue stream that analysts say will provide modest fiscal support, and potentially influence expectations for interest rates and the shape of the yield curve.
The policy change follows the end of a pandemic-era moratorium that paused both payments and collections from March 2020 through September 2023, with delinquencies shielded from credit reporting until late 2024. Now, with both voluntary repayments and involuntary collections underway, the Department of Education’s cash deposits into the Treasury General Account (TGA) are beginning to recover.
