Do you have student loans? Were you hoping that paying them back would get harder and more expensive? Were you hoping the government would get really aggro about collecting on defaults? Were you hoping the whole thing is such a mess that you may have no idea how or what to pay?
Well, you’re in luck, because the Trump administration has got you covered.
As part of his quest to destroy the Department of Education, President Donald Trump is moving the student loan portfolio to the Treasury Department.
Education Secretary Linda McMahon has eagerly blessed this idea, no doubt based on her long history of managing large-scale education projects.
Oh wait. Apparently McMahon’s past experience is more along the lines of putting on Wrestlemania events and facing a lawsuit over allegations that she and her husband, Vince McMahon, looked the other way when a male WWE employee sexually abused multiple teen boys—a lawsuit that continues today.
According to McMahon, shifting the $1.7 trillion portfolio to the Treasury is necessary because her department has “failed to effectively manage and deliver these critical programs.”
By that, McMahon doesn’t mean that her department isn’t doing a good job offering or servicing student loans. She means there are too many borrowers in default, and the Treasury will be better at aggressive debt collection.
So, while she says that this is about “leveraging Treasury’s world-renowned expertise in finance and economic policy,” that rings pretty hollow when the first phase of the three-phase move to Treasury is for that agency to start debt collection on defaulted loans.
You’d think that with 7.7 million borrowers in default on their student loans, along with roughly one-quarter of all borrowers behind on payments, the administration might realize that, hey, people are having trouble paying these debts and perhaps we should address this.
Related | McMahon’s misconduct allegations concern advocates for student safety
But nope. All that is needed are forced collections—think garnishing wages and seizing tax refunds —exactly what the administration said it would do before temporarily delaying the plan back in January. No one knows when it will start up, because no one knows anything about this chaotic, stupid process.
And it isn’t just collection efforts that are a mess. The administration recently celebrated the death of President Joe Biden’s SAVE plan, because by trying to ease the burdens of borrowers, Biden was not just woke but unconstitutional somehow. Now, if you go to the relevant Education Department page, it declares that “SAVE Borrowers Must Act Now to Switch Plans.”
By voting for Trump’s One Big Beautiful Bill, Republicans in Congress signed on to his project of making life harder for student loan borrowers by killing most of the affordable payment plans. This will force millions of borrowers to switch to a plan that likely has substantially higher monthly payments.
But good luck switching. Information on that will come at some vague time in the future. Per Undersecretary of Education Nicholas Kent, who loves for-profit colleges—the kind that encourage students to borrow more money even as their job prospects are much lower than those who attend public colleges—he might get around to it in a few weeks. Maybe.
“In the coming weeks, the Department will issue clear guidance on next steps for borrowers enrolled in the illegal SAVE Plan, including details regarding how borrowers can move into a legal repayment plan,” Kent said.
Gotta commend Kent for hitting the “illeeeeegal!” talking points here while still utterly refusing to provide any guidance to anxious borrowers.
A couple of tiny problems: The Education Dept hasn’t updated its systems to allow people to enroll in one of the remaining plans, and they haven’t even finished rulemaking for another.
So, yeah. Terrific time to transfer the portfolio to a whole different agency
Meanwhile, people are crushed by high gas prices, there are fewer jobs, health care is more expensive, and grocery prices have jumped. What a great time to make a move that will result in millions of people paying significantly more per month for student loans.
That’s sure to help the economy, right?
