The Treasury Department will take operational control of roughly $180 billion in defaulted federal student loans after an interagency agreement announced this week. The Education Department — long the steward of the $1.7 trillion portfolio — started shifting management amid the Trump administration’s broader effort to dismantle the agency. Treasury will initially take over collection for loans in severe default, with a phased plan to assume additional responsibilities “to the extent practicable.” Administration officials framed the move as correcting perceived mismanagement at the Education Department; Education officials say borrowers need not act now and will continue working with the same servicers. For higher education leaders the change raises immediate compliance and borrower‑communications questions and a longer‑term governance dilemma: which federal agency sets policy for repayment, relief programs, and data reporting to colleges and universities.