March 19, 2026 | WASHINGTON, D.C. — Moments ago, the U.S. Department of Education (ED) announced an Interagency Agreement (IAA) that will begin the transfer of administering the entire federal student loan and financial assistance programs to the U.S. Department of the Treasury (Treasury). Per the IAA, ED will begin transferring these responsibilities in three phases, beginning with the administration of Federal Student Aid’s defaulted student loan portfolio, followed by the full student loan portfolio and financial aid programs. The unlawful move is the most recent chapter of Secretary McMahon’s crusade to dismantle ED and will add further confusion and chaos across the student loan system. 

In response, Protect Borrowers Policy Director Aissa Canchola Bañez released the following statement:

“Today’s announcement that the U.S. Department of Education will begin transferring the administration of the student loan system, beginning with default collections to the U.S. Department of the Treasury is irresponsible, reckless, and bad news for our most vulnerable student loan borrowers. With more than 8.8 million Americans already in default and millions more at risk of falling behind after being kicked off the SAVE plan and forced into more expensive options, this move will cause even more confusion about a student loan system that has been fraught with unprecedented disruptions and instability. 

“In the midst of a growing affordability crisis where American families are already struggling to make ends meet, this risks driving millions of borrowers further into financial hardship. Instead of providing relief to the millions of defaulted borrowers who have fallen behind, the Department is moving a portfolio of our most vulnerable borrowers to an agency with little to no expertise in the rights and benefits afforded to borrowers under the Higher Education Act. Borrowers deserve better than to see Secretary McMahon wash her hands of the unprecedented default crisis that her policies have worsened. 

“Student loan borrowers are entitled to unique and important rights under the Higher Education Act—which has too often been denied as a result of incompetence and corruption. Policymakers should have major concerns about this transfer and how it will exacerbate borrower confusion and push relief further out of reach. We call on Congress to engage in critical oversight and demand information on how the Trump Administration will guarantee that the Treasury is equipped with the staff and expertise necessary to support our most vulnerable borrowers and ensure they are able to access the rights afforded to them under the Higher Education Act. Until this is done, the Trump Administration must continue to halt its forced collections machine. For too long, borrowers have been failed at every turn—they don’t deserve to be failed again by an agency that isn’t ready to protect them.”

Further Reading

Substack by Protect Borrowers about the plan to move collections to Treasury: ‘I Broke It, YOU Buy It’: On Linda McMahon’s Reported Plan to Move Student Loan Collections From ED to Treasury

Deep Dive on how efforts to move student loan portfolio out of the U.S. Department of Education is a risky gamble for the U.S. economy: Moving Student Loans Out of the Education Department is a Risky Gamble for Borrowers and the U.S. Economy 

Protect Borrowers statement in response to previous ED plans to move the student loan portfolio out of the U.S. Department of Education: Moving the Student Loan Program to SBA is Illegal, Unserious, and a Distraction

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About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.