Trump's plan to transfer millions of student-loan accounts to the Treasury is in the works, officials confirm

[BumRushDaShow]

Source: Business Insider

May 4, 2026, 3:17 PM ET


The Trump administration is beginning a complicated process of transferring millions of student-loan borrowers to a new agency. The Treasury Department confirmed in an April letter to Sen. Elizabeth Warren — released on Monday — that it has started preparations to take over the Department of Education's 9 million defaulted student-loan accounts.

The confirmation follows a March announcement that the transfer of student-loan accounts to the Treasury would occur in phases, beginning with defaulted accounts, with the goal of eventually transferring the rest of the federal portfolio to the agency. Mason Champion, the Treasury's assistant secretary, wrote in the letter that the transfer has so far "achieved two significant milestones," the first being a request for information from stakeholders on procuring agents to help defaulted borrowers with their options to return to good standing.

The second "milestone" was an agreement between the Treasury and Education Departments to send seven Education employees to Treasury, and two Treasury employees to Education, which Champion said will "support the implementation of the partnership, with an initial focus on the transition of operational responsibility for the defaulted portfolio to Treasury."

The letter did not specify a timeline for each phase, including the timing of the official handover of management of the defaulted portfolio to the Treasury. Warren said in a statement that the agreement "is bad for students and families, and I'll do everything I can to fight back," adding that the department has not provided evidence showing that the transfer would improve borrower outcomes.

Read more: https://www.businessinsider.com/student-loans-transfer-to-treasury-in-the-works-default-repayment-2026-5

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Link to LETTER (PDF) - https://www.warren.senate.gov/imo/media/doc/response_from_treasury.pdf

[UpInArms]

1. Project 2025

Destroy the department of education

https://25and.me/?topics=5#5

...promote "school choice" and erode public education. This has been shown to subsidize wealthy families who were already sending their children to private schools while blowing giant holes in the funding for public schools, leading to worse academic outcomes for both private and public school students. [5] [319] [350] [351] [analysis] [analysis] [analysis]

...eliminate the Department of Education. This would mean that states would have to pay for all of their schools, which could result in less money for schools in poorer areas. [319]

...significantly restrict the free school lunch program. This would mean that many children may not have enough to eat at school. [303]

...eliminate the Head Start program. This would mean that many children from poor families would not have access to preschool. [482]

...make it harder for students to get financial aid for college. This would mean that fewer students from poor families would be able to go to college. [327]

...allow colleges to discriminate against students based on their race and sex. This would mean that some students would be treated unfairly when applying to college. [352]

...use public, taxpayer money for private religious schools. This would blur the line between government and religion, enable discrimination in admissions, hiring and curriculum based on religious beliefs, and reduce funding for and undermine public education. [351]

...prevent the CDC from advising that school children should be masked or vaccinated, saying such decisions should be left to parents and medical providers. This could lead to increased disease outbreaks and a resurgence of preventable diseases like measles and whooping cough. [454]

...phase out federal funding for Title I. This could lead to the loss of more than 180,000 teacher jobs and negatively affect the academic outcomes of 2.8 million vulnerable students across the country [326] [analysis]

[msongs]

2. 1.5 trillion for the military, gotta have priorities nt