The Education Department and Treasury signed an agreement transferring operational control over roughly $180 billion of defaulted federal student loans to the Treasury Department as a first phase of a broader handoff. Treasury Secretary Scott Bessent and Education officials framed the move as an effort to improve collections and fiscal discipline while pledging no immediate changes for borrowers' servicing interactions. The deal signals a structural reorganization of federal student‑aid management that the Trump administration says will continue in phases until Treasury “assumes operational responsibility” for nondefaulted loans. Critics, including consumer advocates and legal experts, warn the shift risks borrower confusion and legal challenges because federal law historically places student‑loan oversight within Education. The transfer marks a major policy inflection point for higher ed finance, debt collection practices, and federal oversight of college access.