Education Secretary Linda McMahon announced an interagency plan to transfer responsibility for defaulted federal student loans to the U.S. Department of the Treasury, shifting collection authority to an agency with access to IRS enforcement tools. The move begins a phased handover of parts of the roughly $1.7 trillion federal loan portfolio and places garnishment powers and tax intercept authority at the center of student‑debt recovery. The transfer recalibrates operational responsibility for borrower outreach and collections, raises legal questions from critics who call the move unlawful, and signals a policy shift that could affect default rates, borrower protections and campus financial‑aid counseling. Colleges and student‑advocacy groups should monitor guidance on borrower notification and implications for enrollment and repayment behavior.