Sponsor
Tim Walberg
Representative · R-MI
Representative · R-MI
The bill centralizes and preserves continuity of Education-related loan administration by moving functions, staff, assets, and authorities to Treasury—reducing immediate service gaps and documenting transfers—while risking transitional disruption for borrowers, added transition costs, loss of Education-specific expertise, and concentrated administrative power that could weaken oversight.
Borrowers and other beneficiaries (students, loan applicants) keep continuous loan servicing and access to benefits because Treasury will centralize servicing/collections and can use existing Education authorities, staff, assets, and funds to avoid gaps during the transfer.
Federal employees whose jobs move with the transferred functions will generally keep positions and related contracts/assets/records transfer to Treasury, preserving employment and operational continuity for those workers.
People and entities with existing orders, grants, contracts, permits, licenses, pending benefits, or ongoing litigation tied to Education functions keep their rights and procedures intact, preserving due-process protections and legal continuity.
Borrowers and students may face service disruptions—billing errors, delayed dispute resolution, and transitional confusion—while loan servicing and administrative functions are phased into Treasury.
Delinquent or defaulted borrowers may face increased enforcement and collection actions (and associated financial hardship) because the transfer expands collection authority and centralizes enforcement under Treasury.
Taxpayers may incur substantial short-term transition costs (moving personnel, systems, and legal roles), plus ongoing administrative burdens to integrate programs and handle expanded enforcement workloads.
Based on analysis of 11 sections of legislative text.
Moves administration of nearly all federal student financial aid and loan servicing from the Department of Education to the Department of the Treasury in phased transfers and preserves legal continuity.
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 almost all federal student financial assistance functions from the Department of Education to the Department of the Treasury and lets Treasury use transferred personnel, assets, records, and funds to operate those programs. The transfers are phased (defaulted-loan functions first, then non-default servicing, then remaining Title IV and related programs), and the Office of Management and Budget must certify no net increase in federal FTEs and make related transition determinations. The bill preserves existing legal actions, contracts, grants, and appeals tied to transferred functions, allows Treasury to exercise authorities Education previously used for those functions, and treats statutory references to Education for affected functions as references to Treasury. It also restricts an existing exemption for delinquent or defaulted student loan debt so such debt cannot be exempted under a specific Treasury debt collection exception once defaulted loans are transferred.