The Education Department and Treasury signed an interagency agreement that transfers responsibility for federal student loans in default—about $180 billion—to the Treasury Department, the first phase of a plan the administration says will eventually shift the entire $1.7 trillion portfolio. Education Secretary Linda McMahon and Treasury officials framed the move as an effort to impose financial discipline and improve collections; opponents warn of borrower confusion and legal challenges because federal law historically vests loan oversight in the Education Department. The agreement leaves borrowers’ servicers and repayment mechanisms unchanged for now, but the broader transfer fuels debates over the future of federal student aid, the Education Department’s role and congressional authority to reorganize or shutter the agency.