ByAdam S. Minsky,
Senior Contributor.
The federal student loan system was spared in the Department of Education’s reorganization announced earlier this week, which will shift several key offices to other federal agencies. But Democratic lawmakers are warning that the administration has other plans for federal student loans, and borrowers may soon be at risk of losing critical legal protections if those plans succeed.
In its announcement earlier this week, the Education Department indicated that multiple offices within the department will be transitioned to other federal agencies through new partnership agreements, diminishing its overall operations and furthering President Donald Trump’s goal announced in March to abolish the department entirely. The Office of Federal Student Aid, which manages the federal student loan system, was not included in that announcement and will remain housed at the department, at least for now.
But more than 40 Democratic members of Congress warned this week that the Trump administration may instead try to sell portions of the federal student loan portfolio to private companies in an effort to further break down the Department of Education. A sale of federal student loans could jeopardize borrowers’ access to key repayment, loan forgiveness, and discharge programs, said the lawmakers. Here’s what a selloff could mean for borrowers.
