US Education Dept Transfers Student Loans to Treasury

0:00On March 19th, the U.S. Education Department is transferring parts of its huge student loan portfolio to the Treasury Department. This marks the initial move in a plan to shift all loan management away from the agency under the Trump administration. The first phase hands over collection on defaulted loans, with more steps to follow for the rest. Treasury will gradually take operational control over non-defaulted loans, too, though no timeline is set for that. Ministers won't notice a difference. They keep working with their current servicers and payment plans as usual. Administration officials point to weak results under the Education Department, where less than half of borrowers are keeping up with payments and nearly one quarter are in default. They argue the prior administration focus too much on forgiveness instead of repayment support, as part of broader efforts to downsize the 40-year-old agency. This question of Treasury has the know-how for such complex debt handling. A 2015 test run showed their collection rates lagging behind private firms used by education.

1:03Trump officials have also held off on restarting force collections like wage garnishments amid election year concerns over affordability. This shift leaves the future of the government's trillion dollar student loan system up in the air, as talks continue on, where full oversight might. Until then, next.