Sponsor
Tim Walberg
Representative · R-MI
Representative · R-MI
The bill centralizes certain Education functions in Treasury to preserve continuity and leverage financial infrastructure for collections, but that shift risks borrower disruption, increased enforcement impacts on vulnerable borrowers, transition costs, loss of Education-specific expertise, and oversight/accountability challenges.
People with existing loans, grants, contracts, applicants, state and local governments, and federal employees continue to receive services without interruption because appropriations, contracts, records, authorities, and ongoing proceedings transfer automatically and existing procedural protections carry over.
Borrowers and taxpayers may see more consistent billing, collections, and faster payment/credit-reporting updates because loan servicing and enforcement are centralized under Treasury's financial infrastructure.
Regulated parties, courts, and administering officials gain clearer legal references and preserved statutory procedural protections (notice, hearings, review), avoiding legal gaps while regulations are updated.
Students and borrowers face service disruption (billing errors, delays, slower dispute resolution and confusion) during the phased transfer as systems, staff, and processes move from Education to Treasury.
Low-income borrowers and delinquent borrowers may face increased enforcement and collection actions (and greater financial hardship) because the transfer broadens collection authority and tightens enforcement under Treasury.
Taxpayers could incur significant short-term transition and integration costs (moving personnel, systems, and processes), and transferring assets/personnel may create administrative burdens for Treasury.
Based on analysis of 11 sections of legislative text.
Transfers nearly all federal student financial aid administration from the Department of Education to the Department of the Treasury in a phased reorganization.
Official title: To ensure the Department of Treasury will manage all federal student loans, federal student debt, and policies regarding student aid eligibility, and for other purposes.
Introduced July 9, 2026 by Tim Walberg · Last progress July 9, 2026
Transfers nearly all federal student financial aid functions from the Department of Education to the Department of the Treasury and gives Treasury the authorities, personnel, assets, and funds needed to operate those functions. The transfer is phased: functions for delinquent/defaulted loan servicing move first, followed by non-default servicing, then remaining Title IV and related programs; OMB must ensure no net increase in federal FTEs and must certify compliance for each transfer date. The law preserves existing contracts, proceedings, and legal requirements after transfer, lets Treasury delegate transferred functions within its department, and treats statutory references to the Secretary or Department of Education as references to the Secretary or Department of the Treasury for affected laws. It also narrows an existing exemption so delinquent/defaulted student loan debt held by Education cannot be exempted from a particular debt-collection requirement once transferred.