Treasury Department begins taking over student loans as the Education Department gets dismantled

The U.S. Department of Education building is seen in Washington, Dec. 3, 2024. (AP Photo/Jose Luis Magana, File) 2026-03-19T20:02:15Z WASHINGTON (AP) — The U.S. Education Department is handing off a portion of its student loan portfolio to the Treasury Department, a first step toward shedding management of all student loans as Trump administration officials dismantle the federal education agency . Under an agreement announced Thursday, the Treasury Department will take over management of student loans whose borrowers are in default, meaning they are months behind on payments. Those loans add up to about $180 billion, or 11% of the government’s $1.7 trillion student loan portfolio. Eventually, the Treasury Department is to take responsibility for all student loans, according to the agreement. A second phase with no timeframe says Treasury will “assume operational responsibility” over non-defaulted loans, “to the extent practicable.” Borrowers do not need to do anything as the change goes through, the administration says. They will continue to work with the same loan servicer and repay their loans the same way. The 17-page agreement outlines a stunning realignment of the nation’s federal student loan programs, which have been overseen by the Education Department since it was created more than 40 years ago. The agreement “marks an intentional and historic step toward breaking up the Federal education bureaucracy and dramatically improving the administration of Federal student aid programs,” Education Secretary Linda McMahon said in a statement. In justifying the change, Trump officials said the Education Department is “ill-equipped” to handle such a big loan portfolio. They blamed the Biden administration for focusing on efforts to cancel student loans rather then help borrowers get back on track with payments. Officials cited recent data showing that fewer than half of all borrowers are currently making payments on their loans, with almost a quarter in default. The ag

原文链接: AP News