Overview
- A bicameral letter led by Elizabeth Warren, Bernie Sanders and Ayanna Pressley, signed by 40 Democrats, urges Education Secretary Linda McMahon and Treasury Secretary Scott Bessent to pause any plan to transfer federal student loans to private investors.
- Politico previously reported that Treasury and Education officials held discussions with finance-industry executives about a possible sale, though no final decision has been announced.
- An Education Department spokesperson said the agency is evaluating ways to strengthen the portfolio’s fiscal health, valuing the debt at nearly $1.7 trillion and citing the interests of students and taxpayers.
- Although a new agency restructuring does not move the loan portfolio, experts warn that destabilizing oversight and any large-scale transfer to private markets could increase errors and borrower harm, citing past FFEL program issues and high complaint rates tied to private lenders.
- Recent policy moves include a settlement with the American Federation of Teachers that restored key income-driven repayment and forgiveness programs through July 1, 2028, heightening concerns that borrower safeguards could be weakened by a sale.