Scott Bessent's Treasury Department will start overseeing the $180 billion of student loans that are in default
Fortune • • nation
Key Points:
- The Treasury Department will take over management of about $180 billion in defaulted student loans, representing 11% of the federal student loan portfolio, with plans to eventually assume responsibility for all student loans.
- This transfer marks a significant step in President Trump's effort to dismantle the Education Department, which has overseen federal student loans for over 40 years, though borrowers will continue working with their current loan servicers without immediate changes.
- The Trump administration argues the Education Department is ill-equipped to manage the loan portfolio and criticizes the Biden administration's focus on loan forgiveness rather than repayment, citing data showing many borrowers are in default or not making payments.
- Critics warn the move could cause borrower confusion and legal challenges, as federal law currently mandates that
