Millions of student-loan accounts will move from Education to Treasury

The Education Department reached an agreement with the Treasury Department to shift oversight of the federal student-loan portfolio, beginning with accounts in default. The interagency deal covers the roughly $1.7 trillion portfolio and will allow Treasury to collect on defaulted debt and support borrowers who have defaulted.

Nearly 9 million borrowers are in default, which typically occurs after 270 days of missed payments. Until now, the Education Department's Default Resolution Group handled those responsibilities. The transfer will happen in phases: Treasury will begin with defaulted portfolios and later "work to provide operational support over non-defaulted federal student loan debt, to the extent practicable and permitted by law." Officials said Treasury is well placed to help because it disburses federal student aid funds and holds tax data on borrowers.

United States

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