Education Secretary Linda McMahon announced a formal handoff that will move responsibility for the federal student loan portfolio—roughly $1.7 trillion in outstanding debt—to the Treasury Department. The change, which begins with loans in default, gives Treasury new collection powers including access to IRS tools such as wage garnishment. The transfer is framed as a compliance and recovery push: Treasury Secretary Scott Bessent’s agency will inherit debt collection and enforcement authorities that the Education Department has struggled to execute. The policy shifts the operational burden of getting delinquent borrowers back into repayment from ED to Treasury and raises questions about privacy, legal authority and borrower protections. For colleges and enrollment officers, the move matters because it could change default reporting, borrower outreach partnerships and institutional risk assessments tied to cohorts historically at higher default risk. Expect legal challenges and legislative scrutiny given the scale of the portfolio and the contentious politics around student debt relief.