News
Treasury Department to Manage Student Loans in Default, Affecting Millions
The US Treasury Department will take over managing defaulted student loans from the Education Department, impacting two million Americans. This shift is part of President Trump's plan to reorganize federal student loan programs, which have been managed by the Education Department for over 40 years.
The Treasury Department is set to assume management of student loans currently in default, according to a recent agreement. This transition marks a significant change in the oversight of federal student loan programs, which have been managed by the Education Department for more than four decades. The agreement outlines a plan for the Treasury Department to eventually take responsibility for all student loans. According to the agreement, the Treasury will "assume operational responsibility" over non-defaulted loans in a second phase, with no set timeline. This realignment is part of President Trump's broader initiative to reorganize the federal education agency. Borrowers do not need to take any action during this transition, according to the administration.
Key Facts
- The Treasury Department will take over management of student loans in default.
- The Education Department has managed federal student loan programs for over 40 years.
- The agreement is part of President Trump's plan to dismantle the federal education agency.
- The Treasury Department may eventually manage all student loans.
- Two million Americans are in default on their student loans, according to Education Department data.
- Borrowers will continue to work with their current loan servicers.
- Borrowers in default can visit myeddebt.gov for information.