Ayelet Sheffey

Trump hands millions of student loans to the Treasury in a major step toward dismantling the Ed. Dept.

The Trump administration took its first step toward transferring the student-loan portfolio out of the Department of Education.

On Thursday, the Department of Education announced a partnership with the Treasury Department on overseeing the $1.7 trillion student-loan portfolio. The partnership, known as an interagency agreement, would hand over the portfolios of defaulted student-loan borrowers to the Treasury, allowing the agency to collect on defaulted debt and support borrowers who have defaulted.

Nearly 9 million borrowers are in default, which typically happens after 270 days of missed federal student-loan payments.

Prior to this agreement, the Department of Education’s Default Resolution Group held those responsibilities. A fact sheet said that the agreement will be carried out in phases; the Treasury will begin its work with defaulted portfolios and will later “work to provide operational support over non-defaulted federal student loan debt, to the extent practicable and permitted by law.”

“As the Federal student aid portfolio soars to nearly $1.7 trillion and with nearly a quarter of student loan borrowers in default, Americans know that the Department of Education has failed to effectively manage and deliver these critical programs,” Linda McMahon, the education secretary, said in a statement. “By leveraging Treasury’s world-renowned expertise in finance and economic policy, we are confident that American students, borrowers, and taxpayers will finally have functioning programs after decades of mismanagement.”

The Department of Education said that the Treasury is the best agency to help oversee federal student loans because it disburses funds for federal student aid programs and has tax data on borrowers. Treasury Sec. Scott Bessent said in a statement that the agency has “the unique experience, the operational capability, and the financial expertise to bring long overdue financial discipline to the program and be better stewards of taxpayer dollars.”

President Donald Trump has previously indicated he was looking to transfer the student-loan portfolio to a new federal agency as part of his larger goal to dismantle the Department of Education. He said in March 2025 that he was considering the Small Business Administration for the job, while McMahon said in later comments that the Treasury was on the table.

This announcement comes at a critical time for student-loan borrowers. The Trump administration is preparing to implement its sweeping repayment changes from Trump’s “big beautiful” spending legislation, which includes new repayment plans and borrowing caps. The fact sheet on the agreement said that the new partnership presents a “promising opportunity to return borrowers to repayment.”

Advocates criticized the announcement. Kyra Taylor, staff attorney at the National Consumer Law Center, said in a statement that shifting student-loan management to the Treasury “raises a new set of obstacles and uncertainty with no plan in place to resolve them.”

“The Department of Education hasn’t answered the question of how it will educate Treasury staff on borrowers’ rights under the Higher Education Act or how it will ensure clear communications with borrowers during this confusing transition,” Taylor said.

Have a story to share? Contact this reporter at asheffey@businessinsider.com.




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I moved back home after living abroad for 12 years. I worried it would be a step backward for my daughter and me.

After 12 years living abroad in Berlin and then Madrid, I never imagined returning home to Ireland. However, a breakup, becoming a single parent to a young teen, and growing concerns about my father’s health made moving back home something I had to consider.

The decision wasn’t easy. I worried about uprooting my daughter from the life we’d built in Madrid and returning to a country I’d once been so desperate to leave. Growing up in Dublin in the 1980s, a time marked by unemployment, diminishing women’s rights, and a deeply conservative church and state, greatly prompted my desire to live elsewhere. The following decades of living on and off in London, France, Germany, and Spain only reinforced that there was a greater world outside my home country.

Sure, there was no denying that Ireland had changed a lot since the ’80s. But there were still elements of the small-town mindset I despised.

Would my daughter resent me later for taking her away from a life in a more progressive and larger European city?

Moving back home was a difficult decision to make

Like many Western countries, Ireland’s housing crisis was at its peak. Moving back would likely mean temporarily living in my childhood home with my older parents — and that certainly felt like a step backward.

Still, in other ways, it felt right. My daughter, an only child, saw her extended family only a few times a year, and I believed being closer to them would help her through her parents’ breakup and those often-difficult teenage years.


Siobhan Colgan drinking outside in madrid

The author loved living abroad.

Courtesy of Siobhan Colgan



Plus, my father, now in his late 80s, had spent much of the year in and out of the hospital. After months of flying back and forth from Madrid to support him and my mother, staying abroad no longer felt realistic.

So I made the decision I never thought I’d make, and we moved back.

The move home surprisingly benefited all of us

Within a month of our return, my father was discharged from the nursing home he had been sent to after a six-month hospital stay. Being there to deal with doctors and carers, support my mother, and share the load with nearby relatives made me feel really grateful. I had always been close to my dad, but now that I was physically around, our bond deepened even more.

My daughter, too, began to thrive. She began building real relationships with aunts, uncles, cousins, and her grandparents. After becoming withdrawn during our final year in Madrid, I now saw her going out shopping with my mom or sitting laughing with my dad; she was slowly opening up again.

Then, four months after coming back, my father died suddenly after a short infection. It was devastating for everyone. But among the grief and tough emotions, I couldn’t deny feeling so thankful that my daughter and I spent those last few months with him.

Additionally, for all my misgivings about “small-town Ireland,” I got to see another side of living in a small community: friends, neighbours, and even locals who just knew them in passing rallied round my mother.

It was the best decision I never wanted to make

It’s still hard to accept my dad is gone, but, of course, life has continued. We now have our own home, a short walk from my mom, and my daughter loves her local school and the friends she’s made.

I still miss parts of our life abroad — my friends, the relaxing outdoor café culture, and reliable public transport. However, I’m building a stable life for my daughter, with deeper ties to family and community.

I will say that when it comes to big life choices, such as moving abroad or moving home, you can only make the decision that feels right to you in the moment. It’s rarely easy, but I’m relieved and glad that I made the choice I did.




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