YourVoice.Now Summary
Your MoneyTreasury would take over federal student loans, Pell Grants, and student aid rules from the Education Department.
Your Money
First, Treasury would take over student loans that are in default. It would handle collections, notices, and disputes. It would also handle ways out of default and credit bureau reports.
Next, Treasury would take over loans that are not in default. It would handle your bills, payments, repayment plans, and loan consolidation. Your loan's terms stay in effect.
In the last step, Treasury would take over the rest of federal student aid. That includes Pell Grants, work-study, Direct Loans, the formula for how much aid you need, and which schools can offer aid.
Federal law sends most government debts that are 180 days late to Treasury to collect. Treasury can exempt some kinds of debt, but student loans could no longer get that exemption.
More about this bill
If you have a federal student loan, the Treasury Department would take it over from the Education Department. That covers your bills, payments, repayment plans, disputes, and what happens if you default. Treasury would also run Pell Grants, work-study, and the rules for who qualifies for student aid. Loans for health students under the Health Education Assistance Loan program would move too. The bill itself does not change how much aid you get or what you owe. The move would happen in three steps. Defaulted loans go first, then other loans, then everything else. The two departments' leaders would pick the dates together, and the bill sets no deadline. Existing loans, pending aid applications, and lawsuits would carry on as before. Federal law sends most government debts that are 180 days late to Treasury for collection, but Treasury can exempt some. Starting with the first step, overdue student loans could not get that exemption. The White House budget office would have to make sure the move adds no federal workers overall.
Congressional Summary
Less Bureaucracy, Better Student Aid Act This bill transfers specified functions relating to federal student aid from the Department of Education (ED) to the Department of the Treasury. Specifically, the bill transfers to Treasury all the functions and authorities exercised by ED related to servicing and collections of defaulted federal student loan debt, servicing of non-defaulted federal student loan debt, and other specified programs (e.g., Federal Pell Grants and Federal Direct Loans). ED and Treasury must jointly determine effective dates for these transfers in accordance with the bill's requirements. (On March 19, 2026, ED announced an interagency agreement with Treasury for Treasury to assume operational responsibility for collecting on defaulted federal student loans, while ED must maintain its statutory responsibilities.) Additionally, the bill transfers to Treasury all personnel and appropriations related to the functions that are transferred under this bill. The bill outlines the authority of the Office of Management and Budget (OMB) related to the functions that are transferred under this bill, including that OMB must ensure that this bill does not create a net increase in full-time equivalent employees at Treasury or ED. Further, OMB must certify compliance with the bill to specified congressional committees. The transfer of these functions does not affect any suits, proceedings, or applications for benefits, services, licenses, permits, certificates, or financial assistance that are pending on the date of this bill's enactment. The bill also terminates the authority to exempt delinquent or defaulted federal student loans from the Debt Collection Improvement Act.
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2026-07-09
- Date Added
- 2026-10-21
- Source
- Congress.gov →
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