Story perspectives

Education Department Transfers Loans Amid Borrower Concerns

3/21/2026

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Summary

Story summary

Education Secretary Linda McMahon reports 9.2 million in default and 2.4 million in late-stage delinquency, in a $1.7 trillion portfolio.
The Education Department will transfer part of its portfolio to the Treasury Department to improve management of defaulted loans.
Rep. Tim Walberg supports the transfer, while Rep. Bobby Scott warns of borrower confusion.
The Education Department has not resumed payments after a court ruling affecting the SAVE plan.

History

Historical Context

The Higher Education Act of 1965, signed by President Lyndon Johnson, aimed to enhance educational access through federal funding, establishing programs like the Federal Family Education Loan Program. By 2023, the U.S. faced $1.7 trillion in student loan debt, prompting the transfer of loan management from the Education Department to the Treasury, highlighting ongoing challenges in student debt management and policy reform.

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Story summary

Education Secretary Linda McMahon reports 9.2 million in default and 2.4 million in late-stage delinquency, in a $1.7 trillion portfolio.
The Education Department will transfer part of its portfolio to the Treasury Department to improve management of defaulted loans.
Rep. Tim Walberg supports the transfer, while Rep. Bobby Scott warns of borrower confusion.
The Education Department has not resumed payments after a court ruling affecting the SAVE plan.

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