President Donald Trump’s Student Loan Plan Sparks Backlash as Millions Face Treasury Transfer

A major change to student loans is underway — and it’s already stirring controversy.

According to a May 4 report from Business Insider, the Trump administration has begun preparing to transfer millions of student-loan accounts from the Department of Education to the Treasury Department. The shift will start with roughly 9 million borrowers who are currently in default.

Per the outlet, officials confirmed the transition is already in motion, with staff from both agencies working together to manage the handoff. However, no clear timeline has been given for when the Treasury will fully take control.

Supporters say the move could improve how defaulted loans are handled. But critics, including Elizabeth Warren, strongly disagree.

Warren called the plan “bad for students and families,” noting she’ll “do everything I can to fight back.” The United States Senator also shared that the department has not detailed how the move would improve outcomes for borrowers who are already struggling to navigate repayment.

Experts have also raised concerns that shifting accounts to a new agency could disrupt existing systems. “Having systems that are spread across multiple agencies really puts the entire system at risk and is going to make it a lot harder, not only to communicate with borrowers, but also to make sure that we are moving toward a more streamlined system,” said Sarah Sattelmeyer, education project director at the left-leaning think tank New America, told the outlet.