The Education Department announced a phased transfer of its roughly $1.7 trillion federal student‑loan portfolio to the U.S. Treasury, beginning with operational responsibility for defaulted loans. Treasury officials, led publicly by Secretary Scott Bessent, will assume collections on roughly $180 billion in defaulted debt and take on work the department has long managed. The two agencies described a multi‑stage plan that could later move non‑defaulted loans and FAFSA administration to Treasury; congressional action would be required for any permanent reorganization. Borrowers do not need to act now, but advocates warned the transfer could create new servicing disruptions for about 9 million borrowers and complicate ongoing debt‑relief and repayment operations.