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Posted on 03/27/2026 10:42:23 AM PDT by SeekAndFind
Bad news: Tax Day is just one month away. But the U.S. Department of Treasury just announced a rare gift for taxpayers: A dose of sanity on college loans.
Today, the U.S. Department of Education and the Treasury Department signed an agreement that helps wind down the education agency, moves more responsibilities over college loans to Treasury, and simplifies the college lending process.
This is the 10th interagency agreement between the Education Department and other federal agencies. These agreements follow the White House executive order issued one year ago this week, calling for the end of the Education Department.
And this is a big one. Student loans make up two-thirds of the Education Department’s budget, and just under half—40%—of borrowers are not making any payments on their loans. Student loan debt has ballooned to $1.7 trillion and affects more than 42.8 million student borrowers. For decades, the Treasury Department has worked with the Education Department to collect on defaulted student loans. Treasury also handles general debt collections through the IRS, all of which makes this agreement a logical move for student loans.
And the announcement continues to build on the department’s promise to streamline federal education functions and cut red tape.
The move comes after years of instability in federal student loan policy. In 2023, President Joe Biden’s administration attempted to transfer up to $20,000 per student in outstanding debt from students to taxpayers, a plan the Supreme Court ultimately struck down as unlawful.
Shortly after, Biden also introduced a new sweeping income-driven repayment plan projected to cost taxpayers nearly $500 billion, effectively a large-scale debt transfer plan, which was ultimately halted by courts.
Pandemic-era policies further distorted the system. The student loan payment pause, extended six times under the Biden administration via executive action, delayed repayment obligations for more than three years, and closer to four when accounting for the administration’s “on-ramp,” during which borrowers were not penalized for missed payments. This lapse in repayment cost taxpayers $258 billion in forgone interest and other benefits.
Against this backdrop, recent reforms enacted through the One Big Beautiful Bill Act aim to restore accountability and place the student loan system on a better, more sustainable path. These changes include the introduction of a new income-driven repayment plan, the Repayment Assistance Plan, which requires accurate and timely income data from borrowers to function effectively, information that Treasury has access to.
In 2019, Heritage Foundation research recommended moving student loans to Treasury in our blueprint for closing the Education Department. Cato Institute researcher Andrew Gillen has also noted that transferring the student loan program to the Treasury could prove especially valuable by simplifying the financial aid application process. The aid application already requires information from students and their parents’ tax forms, and the Treasury already has this information because the agency collects it directly.
The new partnership has three phases. First, Treasury will assume responsibility for collecting outstanding student loan debt, the giant $1.7 trillion figure mentioned above. Once this process is underway, Treasury will begin servicing loans (including collections of existing loans). Finally, the agency will control student applications for assistance, otherwise known as FAFSA. These phases will be implemented to the extent permitted by law.
Under the Biden administration, the Education Department had fumbled FAFSA, releasing the application late in the year and with technical glitches.
Crucially, Treasury officials are not announcing new “forgiveness” policies that would transfer college loan debts to taxpayers, but collection procedures. This agreement will protect taxpayers from paying someone else’s loan, and appropriately so.
Just like the other interagency agreements the Education Department has signed, this partnership downsizes Washington. The agreement moves certain functions from an ineffective agency (Education) to an office that already performs those functions (Treasury).
Ultimately, the federal government should not be in the business of student loans. Such activity puts taxpayers at risk and has created a dysfunctional bureaucracy. The new interagency agreement begins repairing the harm to students and taxpayers.
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So, just moving the deck chairs around.
NOTHING made higher education more unaffordable than government stepping in to make it "affordable." As soon as the government slobbered tens of trillions of dollars into universities, they got the green light to raise prices at 2x and 3x the general inflation rate.
I don't want responsibilities "moved to Treasury." I don't want the lending process "simplified." I don't want "cut red tape." I don't want "streamlined federal education functions."
I want the damn DOE shut down, federal government OUT of higher ed, and lending (if needed at all) to be given back to the private sector.
This is SO SO disappointing.
FTA
Student loans make up two-thirds of the Education Department’s budget, and just under half—40%—of borrowers are not making any payments on their loans. Student loan debt has ballooned to $1.7 trillion and affects more than 42.8 million student borrowers.
<><>In 2023, Joe Biden’s administration attempted to transfer up to $20,000 per student in outstanding debt from students to taxpayers, a plan the USSC struck down as unlawful.
<><>Shortly after, Biden also introduced a new sweeping income-driven repayment plan projected to cost taxpayers nearly $500 billion, effectively a large-scale debt transfer plan, which was ultimately halted by courts.
They need to get back as much of that money as they can before the next democrat gets into the WH. I’d turn it over to collection agencies.
Sadly I agree. It’s just moving the programs and people to other bloated departments.
Not a word on elimination of programs, budget cuts or staff cuts.
I don’t want responsibilities “moved to Treasury.” I don’t want the lending process “simplified.” I don’t want “cut red tape.” I don’t want “streamlined federal education functions.”
The problem is: do we run out of time before we stop everything from collapsing?
President Trump is using the US military power to create a new Pax Americana. This is one way to buy us time. Slowing down the whole insanity of the cost of higher education buys more time.
It is all designed to save the Republic.
If Trump had 61 staunch Trumpian Senators and 300 staunch Trumpian Representatives in the House, he might have enough power to do what you want right away.
“Incrementalism works.”
Here we are, ten long years after the Dem Coup to destroy President Trump, and we are still waiting for something, ANYTHING to be done to hold the coupists to account.
Trump is super-human. But I despair that we don’t have 100 like-minded people in our government.
people are going to laud this but I think this move is dead wrong.
Why?
The education systems in all the blue states are completely woke.they became that way because of doe and state pressure.
the dept of education exerts tremendous leverage over secondary schools.
what needed to happen was for the department of education to exert its tremendous leverage to turn blue states away from woke education.
that’s not going to happen.
the department of education has just stripped themselves of all power over the state education systems.
without federal pressure—the blue states educational systems will remain woke and toxic.
of course the red states will steadily become less woke and less toxic.
but now you have created two very different educational systems for two different countries.
Should never have existed in the first place.
Here we are, ten long years after the Dem Coup to destroy President Trump, and we are still waiting for something, ANYTHING to be done to hold the coupists to account.
I fail to see how you expected any action against the deep state when they controlled 60% - 90% of the levers of power, which they did, from 2016 to January, 2025.
Making endless unanswered phone calls won’t recoup crap. This is a losing proposition watch for them to be written off, which may not be a bad thing if tether to a law that the government can never again load any money to anything. The constitution didn’t mention the government could do that...
If all federal agencies with no Constitutional authority to exist are ended, the government would only be a tiny fraction of its current size.
Carter’s legacy.
Sign all the Debt over to the U.S. Treasury. I’ve heard they know how to collect; blood from a turnip, even.
Shutter DoEd permanently, and till the field with salt such that it can never rise again.
These Loans should be privatized requiring the schools to fund the process.
More than a few of those schools won’t be around. The jig is up. I could see the Cal Berkeley’s accepting more marginal HS graduates as the state colleges see fit to close-lack of enrollment. They’ll be competing for the students that want the more prestigious sheepskin.
Maybe universities like Alabama and LSU can work on academics and facilities over the football program, and working with Netflix on sorority bubblehead reality shows. Should outrage you that a university has 100 million for a football stadium and has to have the tin cup to support their bloated budgets.
Maybe universities like Alabama and LSU can work on academics and facilities over the football program, and working with Netflix on sorority bubblehead reality shows. Should outrage you that a university has 100 million for a football stadium and has to have the tin cup to support their bloated budgets.
College men from LSU....went in dumb, come out dumb, too.
Injunction coming in 3,2,...
It is not. A temporary reprieve is not the end.
Congress needs to pass an abolish bill, on its own, let's say magically congress just decides (which they will not) to abolish the DoEd because it sounds like a fun day at Universal Studios
Or,
Trump (Administration) needs to formally ask congress to do its job and pass an abolish bill. Which then gets congress to act because they won't on their own without being asked.
I hope. I wish. I don't see it happening. This article does not even mention the concept of abolishing the department, just celebrating a temporary end until the next president revives the department still on the books.
Something un-abolished and no abolish even planned does not have a "nigh" end.
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