The U.S. Department of Education head office is seen on March 06, 2025 in Washington, DC.
Chip Somodevilla|Getty Images News|Getty Images
The U.S. Department of Education prepared for the Treasury Department to take a hand in handling the nation’s $1.6 trillion trainee loan portfolio, current court files reveal.
” The Department had actually been working out a memorandum of comprehending with the Treasury Department relating to trainee loan management,” Rachel Oglesby, the chief of personnel at the Education Dept., stated in a court statement submitted late on Tuesday.
The contract included moving 9 Education Dept. workers from the firm’s Federal Trainee Help Default Collections System to Treasury “to talk about collections activities,” a representative for the Education Department informed CNBC.
Education Department prepares with the Treasury Department are now on hold after U.S. District Judge Myong Joun in Boston obstructed the Trump administration on Might 22 from its efforts to take apart the Education Department.
Joun purchased the department to rehire the more than 1,300 workers impacted by mass layoffs in March, and obstructed the department from moving trainee loans to the Small company Administration.
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Specialists state the Treasury talks are more proof that the Trump administration wants to decrease the function of the Education Department.
President Donald Trump stated on March 21 that the Small Company Administration, rather of the Education Department, would manage the nation’s financial obligation.
” They’re all set for it,” the president stated of the SBA, talking to press reporters in the Oval Workplace. “They’re waiting on it.”
Loan transfer to any other firm needs Congress
At the time of Trump’s statement that trainee loans would transfer to the SBA, professionals had actually stated the next most sensible firm would have been Treasury, considering that it currently contributes in gathering past-due financial obligations from Americans through the Treasury Offset Program.
Still, financial assistance specialist Mark Kantrowitz mentioned that The College Act of 1965 is “extremely clear” that the Education Department’s Federal Trainee Help workplace is “accountable for trainee loans.”
” It will need an act of Congress,” Kantrowitz stated, to move the loans to either the SBA or Treasury.
Customer supporters reveal concerns that the mass transfer of accounts to another firm might activate mistakes, or compromise customers’ personal privacy. They likewise raised issues about how a modification in firm may impact special trainee loan securities, and programs such as Civil Service Loan Forgiveness.
More than 42 million Americans hold federal trainee loans.