U.S. President Donald Trump gestures as he walks to board Marine One, while departing the White House en route to Florida, in Washington, D.C., U.S., March 7, 2025.
Evelyn Hockstein | Reuters
SBA, Commerce or Treasury could take student loans
Student debt transfer could lead to major disruptions
Transferring the loan accounts of tens of millions of people to another agency would only worsen an already troubled lending system, said Michele Shepard Zampini, senior director of college affordability at The Institute For College Access and Success.
Federal student loan borrowers complain about inaccurate bills, trouble reaching their servicers and being denied relief for which they’re eligible.
“Borrowers and students need more stability, and this would create chaos,” Shepard Zampini said in a previous interview with CNBC.
Moving the student loans to another agency “could take a few months,” Kantrowitz said. In the meantime, borrowers might find it impossible to get their loan forgiveness applications processed under both the Public Service Loan Forgiveness program and income-driven repayment plans.
However, the terms and conditions of your federal student loans will not change even if the agency overseeing them does, Kantrowitz said. Borrowers’ rights were guaranteed when they signed the master promissory note when their loans were originated, he added.