Suze Orman: Do This If You’re Behind on Federal Student Loan Payments
Written by
Catherine Collins
Edited by
Zuri Anderson
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Over the past few years, federal student loan borrowers have had protections in place that prevented defaults from negatively affecting their credit. Now, in mid-2025, the federal government announced that procedures will begin to collect on any defaulted student loan debt.
That means that the federal government can withhold tax refunds and garnish wages from anyone who has not paid their federal student loan debt. That includes parent borrowers who are late on their Parent Plus student loan payments.
According to Suze Orman, a best-selling author and expert in personal finance, approximately 5 million federal student loan borrowers are in default. Here are the steps she recommends for those who are behind on student loan payments in 2025.
See Where You Stand
Orman said that in order for federal student loan borrowers to improve their financial situation, they have to find out whether they are currently behind on their federal student loan payments or already in default.
Each student loan borrower has an account on the Federal Student Aid dashboard, where they can find out more information about who their servicer is, whether or not their loans are in default and what their options are. Additionally, there will be a phone number for their student loan servicer if they need to call to find out what options are available to them.
Get Loan Rehabilitation
The federal government has a department to help student loan borrowers who are currently in default. It’s called the Department of Education Default Resolution Group. By working with this program, borrowers make a specific number of on-time payments, and in return, the federal government will rehabilitate their loans and remove the default from their credit report.
This is one way that borrowers can rehabilitate their loans, get current and prevent the government from garnishing their wages.
Ask for Help
Orman also suggests family members can help student loan borrowers who are behind on payments or have already defaulted on student loans. However, Orman says that it’s important for borrowers to respect their parents’ or grandparents’ retirement plans and make sure that helping repay student loans does not negatively impact their retirement income.
Final Thoughts: Take Action
Ultimately, Orman’s main piece of advice to student loan borrowers who may be seriously late or in default is to take action. Doing nothing can cause bigger problems, and there are numerous programs and ways to get current on student loans.
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