Millions of student-loan accounts are being transferred to the Treasury — and the first phase is launching
The Trump administration is launching its new "Default Resolution Hub" for student-loan borrowers as part of the transfer of accounts to the Treasury.
The Education and Treasury Departments have initiated the first phase of transferring federal student loans to the Treasury Department. An online support center for defaulted borrowers, known as the Defaulted Loans Support Center, has been launched to streamline the repayment process. Previously, defaulted borrowers had to complete paperwork to access rehabilitation and consolidation resources.
The new portal, which was beta-tested with 15,000 borrowers, allows them to make online payments, making it faster for them to re-enter repayment. The transfer of defaulted student-loan management to the Treasury is part of a multi-phase plan that eventually includes non-defaulted federal student loans. Education Secretary Linda McMahon stated that the Education Department was never meant to act as a major financial institution and that partnering with the Treasury improves the administration of federal student aid programs.
Lawmakers and former officials have raised concerns about the Treasury's ability to manage the $1.7 trillion student-loan portfolio. The new portal is intended to serve as a centralized hub for borrowers in default, providing a faster path to repayment and a more efficient system for both borrowers and taxpayers.
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