"With roughly nine million student borrowers in default, the Treasury Department will “assume operational responsibility for collecting” on those loans, the Education Department announced Thursday," Inside Higher Ed reports.

... "Melanie Storey, president of the National Association of Student Financial Aid Administrators, said having Treasury manage defaulted borrowers is nothing new, for the most part."

"Although FSA staff members within the Default Resolution Group and the Default Management and Collections System were historically the point people borrowers contacted for counseling and to figure out the next steps, it was always the Department of Treasury that actually collected involuntary payments for defaulted loans under the authority of the Debt Collection Improvement Act, Storey explained."

"'Withholding of tax refunds and other government benefits can only be done by Treasury,' she said. 'So, this isn’t necessarily as revolutionary.'"

"But where things could get trickier, she added, is if the Education Department takes further steps to transfer other parts of the $1.7 trillion portfolio, as is alluded to throughout ED’s news release and fact sheet."

"'The devil is really in the details' as we ask 'what will happen next,' Storey added, 'and that’s not clear.'"

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 3/19/2026