Here’s what Iowans in default need to know.

Iowans who have fallen behind on federal student loans risk having money taken from their paychecks as the government resumes collections for borrowers in default for the first time since the COVID-19 pandemic.

In the coming weeks, loan holders will start the process of taking money from the paychecks of borrowers who have missed their payments for roughly nine months or more. They’ll also start moving to collect from other federal payments, including tax refunds and Social Security benefits.

Linda McMahon, secretary of the U.S. Department of Education, unveiled the news on April 21, which had been expected since President Donald Trump took office in January.

Here’s what you need to know about the federal government resuming collections on defaulted student debt and how many student loan borrowers are in Iowa.

When will the Education Department resume involuntary collection for borrowers in default?

Beginning May 5, the department will start the process of recollecting funds from borrowers.

Collections for defaulted borrowers were first paused in March 2020 under the first Trump administration and extended for several years under President Joe Biden before resuming in fall 2023. However, the Education Department delayed reporting defaults to credit bureaus until after the 2024 presidential election.

All borrowers in default will be notified of their status by email over the coming weeks. The agency will urge borrowers in those emails to either pay their bills, enroll in an income-driven repayment plan, or sign up for loan rehabilitation or consolidation.

How many people are in default on their federal student loan payments in the U.S.?

Out of the more than 42 million borrowers who owe more than $1.6 trillion in student debt, more than 5 million have not made monthly payments in over a year and are in default, according to the Education Department. Another 4 million are in late-stage delinquency, meaning they haven’t made payments for up to 180 days and face going into default.

Besides wage garnishment and seizure of government benefits, defaulting can also significantly harm your credit score and ability to apply for other loans or rent an apartment.

How many people in Iowa owe federal student loans?

Out of the more than 20,000 graduates of the class of 2024 from Iowa regents universities, community colleges and nonprofit and for-profit colleges, 53% will graduate with some debt, according to a report from Iowa College Aid.

The total debt for the class of 2024 was more than $288 million.

Here is the average debt for students after graduation by type of higher education institution:

• Private for-profit 4-year or above: $33,113

• Private not-for-profit, 4-year or above: $32,770

• Regent universities: $29,664

• Community colleges: $13,382

Approximately 429,000 Iowans owed $13.3 billion in student loan debt in March 2022, according to the federal data. The average student loan debt in Iowa for borrowers was among the lowest in the U.S., according to a report from SoFi last September.

Federal Student Aid office has lost hundreds of employees since Trump resumed office

As part of Trump’s broader effort to shrink the federal government, his move to dismantle the Education Department has recently led to significant staffing cuts in key offices overseeing student loans.

Internal organization charts obtained by USA TODAY in March showed hundreds of positions within the offices of Federal student loans, Pell Grants and the Free Application for Federal Student Aid (FAFSA) had been eliminated due to layoffs, early retirements or buyout offers.

Experts claim the cuts to these offices may cause delays and disruptions for borrowers and college students trying to navigate an already complicated federal financial aid system.

USA TODAY reporter Zachary Schermele contributed to this report.

Cooper Worth is a service/trending reporter for the Des Moines Register. Reach him at cworth@gannett.com or follow him on X @CooperAWorth.

This article originally appeared on Des Moines Register: Here’s what Iowans need to know about student loan default collections