Department of Education Creates Chaos, Announces Transfer of Student Loan Portfolio To U.S. Treasury Department
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FOR IMMEDIATE RELEASE
March 20, 2026
Contact: Natalia Abrams
WASHINGTON, D.C. – The Department of Education announced today that it will initiate a transfer of the student loan portfolio to the U.S. Department of the Treasury through an interagency agreement. The Student Debt Crisis Center (SDCC) strongly opposes this reckless transfer, as it will create more confusion and harm to Americans with student loan debt.
Due to the ongoing affordability crisis, many borrowers are increasingly worried about their ability to make payments, and the added uncertainty is only deepening their confusion and stress. Today’s announcement follows several other developments that borrowers are closely tracking:
The most affordable repayment plan created, the Saving on a Valuable Education (SAVE) plan, was deemed illegal by the Eighth Circuit Court, forcing 7 million borrowers currently enrolled in SAVE to be moved out of the plan. Many will face higher payments.
Over 9 million Americans have defaulted on their student loan debt, while a few million are now delinquent.
The Public Service Loan Forgiveness Program is under attack, unnerving millions of public service workers.
More than half a million borrowers are stuck in an application processing backlog, and the entire student loan system is set to be overhauled beginning on July 1.
“For the past two years, borrowers have faced constant uncertainty and a troubling lack of communication from the Department of Education. Transferring the student loan portfolio to the Department of the Treasury will only deepen the confusion and chaos for millions who are still waiting for clear, reliable guidance,” said Natalia Abrams, SDCC President & Founder. “Americans enrolled in the SAVE plan have yet to receive any meaningful direction about their options. Instead of fixing these failures, the Department now appears ready to hand off the portfolio in a reckless and disorganized manner—leaving Americans with student loan debt to wonder: what comes next?”
The Department of Education announced that this transfer will be divided into three phases, starting with borrowers in default, followed by the entire student loan portfolio, and finally all federal financial assistance programs.
For more information or to schedule an interview, please contact Natalia Abrams at natalia@studentdebtcrisis.org.
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About Student Debt Crisis Center
Student Debt Crisis Center is a national advocacy organization with nearly 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.
