The U.S. Department of the Treasury and the Department of Education (ED) jointly announced a new partnership under which the Treasury will assume responsibility for collecting on defaulted federal student loan debt, according to a March 19 joint statement from the departments.
The Federal Student Assistance Partnership will enhance the administration of student aid programs, mitigate any fallout and cost to taxpayers from mismanagement of the federal student loan portfolio, and facilitate the return of defaulted borrowers to repayment.
“As student loan debt nears $1.7 Trillion, it’s clear that [the ED] was never intended to serve as our nation’s fifth largest bank,” U.S. Secretary of Education Linda McMahon said in a March 19 post on X. “That’s exactly why we are partnering with [the Treasury] to restore fiscal sanity and better align student aid programs with students, families, and borrowers.”…