Student loans moving to Treasury, expert says ED shutdown closer
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The Department of Education (ED) is a big step closer to closure.
The Trump administration announced Thursday an interagency agreement between ED and Treasury to move student loan operations to Treasury; This agreement will “assume operational responsibility for collecting defaulted Federal student loan debt and provide operational support for ED’s efforts to return borrowers to repayment.” he said in a broadcast.
“I think we were very clear last week that this is a multi-phase process,” Education Undersecretary Nicholas Kent told Fox News Digital on Monday.
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U.S. Department of Education building in Washington, D.C. (Erin Scott/Bloomberg via Getty Images)
During the 2024 campaign, then-candidate Donald Trump promised to eliminate the Department of Education and signed an executive order directing his administration to: start messing it up.
“The Secretary has gone on record saying that these interagency agreements are proof of concept, that we want to show Congress, we want to show families, we want to show mothers, fathers and families that the Department of Education does not need to be here to keep federal grant aid and federal student loans flowing to borrowers,” Kent said.
Andrew Gillen of the Cato Institute told Fox News Digital that this particular shift in responsibilities is significant because previous interagency agreements were “relatively small.”
“Yet this student loan move is the largest staffing and the largest budget component of the Department of Education. So if it gets sent to the Treasury, that would really suggest that this is moving a significant portion of the Department of Education elsewhere,” Gillen said. he said.
“I think that’s absolutely true,” Kent said, agreeing with Gillen’s analysis. “Characterizing this as the next and biggest step towards dismantling the Department of Education is absolutely the right way of thinking.”
This interagency agreement follows an effort by the Trump administration to shift power from a handful of offices and programs to other federal agencies as it seeks to completely dismantle the federal department.
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An expert speaking to Fox News Digital said that the Department of Education (ED) is a big step closer to shutting down. (Getty Images)
“Removing layers of bureaucracy in Washington is an essential part of our ultimate mission,” Secretary of Education Linda McMahon said in a press release. “As we partner with these agencies to advance federal programs, we will continue to collect best practices in each state through our 50-state tour, strengthen local leaders in K-12 education, restore excellence in higher education, and work with Congress to enact these reforms.”
The department added that shifting student loan responsibilities to the Treasury “will reduce the ongoing impacts and cost to taxpayers of the Biden Administration’s mismanagement of the Federal student loan portfolio and make it easier for defaulted borrowers to return to repayment.”
The total of student loans owed is approximately $1.7 trillion, according to the department. He said less than 40 percent of borrowers had come up with a repayment plan and almost 25 percent defaulted.
“This will benefit students by streamlining the aid application and student loan repayment processes, and will save taxpayers money by reducing losses on student loans,” Gillen told Fox News Digital. he said. “Once the move is complete, Education’s largest budget and staffing needs will be addressed elsewhere, making closing the Department of Education much more feasible.”
The Trump administration announced an interagency agreement between the Department of Education and the Treasury Department to move student lending operations to the Treasury. (Mandel Ngan/AFP/Getty Images)
MCMAHON TOLD THE STORY THAT REassured PARENTS ABOUT SPECIAL NEEDS THAT FUNDING WILL CONTINUE WHEN THE SECTION SHOWS.
According to Kent, the emergency service has made “historic progress in such a short time.”
“In just over a year, we reduced the size of the department by over 40%. We signed 10 interagency agreements. We did multiple staffing details for other agencies where staff in the department were literally physically sitting in other agencies,” he said. “We are showing Congress and others that this proof of concept works and that we want to continue to work with Congress to commemorate these changes in legislation, with the end goal of shutting down the department and laying off ourselves.”
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