The One Big Beautiful Bill Act includes the largest overhaul to the federal student aid system in decades, limiting loan repayment and debt forgiveness options for borrowers.
As the Federal student aid portfolio soars to nearly $1.7 trillion and with nearly a quarter of student loan borrowers in default, Americans know that the Department of Education has failed to effectively manage and deliver these critical programs. By leveraging Treasury's world-renowned expertise in finance and economic policy, we are confident that American students, borrowers, and taxpayers will finally have functioning programs after decades of mismanagement.
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. The move is ED's latest effort to render itself obsolete as part of the Trump administration's plan to eliminate the department. This is the 10th interagency agreement it has signed to share with or spin off functions to other federal agencies.
"Our city advances when our workers can too. By connecting city workers to undergraduate and graduate educations, we're empowering the next generation of civil servants who act ambitiously, think creatively and believe firmly in government's ability to improve the lives of working people."
The 13-member panel, comprised largely of state officials, think tank researchers and higher ed lawyers, spent the last four days negotiating the rules of a new college earnings test called Do No Harm-which applies to all degree programs-as well as changes to the existing gainful-employment rule, an accountability metric that only applies to certificate programs and for-profits. The department's proposal, which aligns the two accountability
These actions further align the postsecondary and workforce education programs of ED and DOL and will position DOL as the central hub for America's postsecondary education and workforce development programs. Through the agreement, Labor is essentially administering ED grant programs, while ED continues to set the budget, criteria and priorities for the programs and manage hiring and other HR processes.
"Here's the reality: When you come to the table prepared with smart and dedicated people that are focused on a clear goal, you can move quickly and intentionally without sacrificing the thoroughness and the careful deliberation that this process deserves,"
While overall more people are choosing college, there are important shifts happening in where students are going and where they're not. Enrollment at private four-year colleges is down. Fewer people are enrolled in master's degree programs. But enrollment is up at four-year public universities and at community colleges. There, it's driven by students choosing short-term credentials tied to the workforce.
"The Biden Administration's regulation was over broad as it required all private institutional owners, including at faith-based colleges, to sign program participation agreements,"
