Treasury takes over defaulted student loans. What it means for you.
USA Today • • nation
Key Points:
- The U.S. Treasury will take over collection operations for defaulted federal student loans in a phased approach, starting with managing defaulted debt and working with private agencies to help borrowers rehabilitate or return to good standing.
- Approximately 7.7 million borrowers with $180 billion in federal student loans are currently in default, and nearly 12 million borrowers are either in or approaching default status.
- Borrowers are advised to continue working with their current loan servicers and those in default should seek help at myeddebt.gov; no immediate action is required due to the transition.
- Critics warn that transferring defaulted loans to Treasury may confuse borrowers and increase financial hardship, as the agency may lack expertise in borrower rights and relief options under
