WASHINGTON D.C. (WTVB) – In a move to assist the defaulted student loan process, the U.S. Education Department is handing off its trillion-dollar portfolio of federal student aid programs to the Treasury Department.
Last fall, the Education Department signed several interagency agreements to move its core programs to other parts of the federal government.
The Trump administration is looking to close down the Education Department, but can’t do so without approval from Congress.
Michigan 5th District Congressman Tim Walberg is the chairman of the U.S. House Education and Workforce Committee, and agrees with the move. “This a smart, practical change. Treasury already handles large, complex financial systems, so it’s well positioned to manage student aid more efficiently and responsibly. This shift will simplify how aid is delivered, reduce delays, and make better use of taxpayer dollars. Most importantly, it will make the process easier and more reliable for students and families who depend on this support.
Under the latest interagency agreement, the Treasury Department will take over the collection of defaulted federal student loan debt, and will support the Education Department’s efforts to bring borrowers back into repayment. The student loan portfolio stands at nearly $1.7 trillion. The Education Department says less than half of student loan borrowers are currently repaying those loans, and that nearly a quarter of student loan borrowers are in default.
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