The Trump administration is transferring management of the nation's nearly $1.7 trillion federal student loan portfolio from the Department of Education to the Treasury Department. This move, formalized in a 17-page interagency agreement, is part of the larger effort to dismantle the Education Department. The agreement includes giving Treasury operational control of over $180 billion in defaulted loans, which cover approximately 10 to 12 million borrowers, representing about 11% of the total portfolio. The second phase will extend Treasury’s reach to non-defaulted loans and give Treasury full control of the entire federal student lending program. The move comes with significant implications for the 43 million Americans with federal student debt. Concern among borrower advocates is that the transfer could exacerbate the need for federal law enforcement to oversee federal student loans, raising legal challenges from state attorneys. Critics argue that the move could lead to a more aggressive approach on defaulted debts and a tougher financial collections environment.