Utah Faces Student Loan Pressure Under Trump’s 2025 Crackdown

Young couple managing bills and student loan repayment on laptop in small apartment, looking stressed but focused.

With federal student loan collections resuming under President Trump’s 2025 policy push, more than 320,000 Utah borrowers—10% of the state’s population—are facing financial uncertainty. As of May 5, defaulted loans are once again eligible for tax refund garnishment, Social Security offsets, and wage garnishments.

Why This Matters

Roughly 83,200 Utahns are already behind or not making progress on their loans. Madison Owens, a 27-year-old grad student at the University of Utah, is one of many who worry they won’t be able to repay. “It’s just impossible to afford anything right now,” she said.

Her case reflects the larger challenge: low wages, rising prices, and deferred dreams. The federal freeze on loan collections ended, and those in default now face aggressive tactics from the Department of Education.

What Borrowers Can Expect

Tax refunds may be seized to repay debts
Wages can be garnished up to 15%
Social Security benefits may be withheld for older borrowers
Private and for-profit school grads face highest risk

Find Out If You're on the Default List & What to Do Next

University student walking across campus with debt notices in backpack, showing concern about loan repayment.

State Perspective

Utah's average debt per borrower is $33,872—below the national average—but 26% are not in good standing. About 5 million borrowers nationwide are already in default, and millions more are approaching it.

Economics professor Marshall Steinbaum at the University of Utah warns that wage stagnation and job mismatch make full repayment unrealistic. “It’s basically squeezing blood from a stone,” he said.

School-by-School Impact

SLCC has the highest default rate among Utah’s public colleges (11%). Nightingale College and other for-profit institutions see even higher levels of deferment and forbearance. Meanwhile, schools like BYU show stronger repayment performance.

What You Can Do Now

If you're concerned about your loans, review your repayment plan immediately. Consider income-driven repayment, deferment options, or loan rehabilitation if you’re in default.

See If You Qualify for a Lower Payment or Forgiveness

Looking Ahead

As loan collections ramp up again, Utah borrowers like Madison Owens represent a much larger national concern: will higher education continue to be a path to mobility, or a source of lifelong debt? Whether you’re already in default or trying to avoid it, the key is to stay informed and proactive.

Explore your options today, and take back control before collections hit your paycheck or tax return.

Facing Default? Get Help Before It Hits Your Paycheck