Why It’s Good News That Student Loans Are Moving From Education to Treasury
Andrew Gillen
March 20, 2026
Shifting responsibility for student loans to the Treasury Department makes sense for students and taxpayers, while making it easier to shut down the Education Department.
The Department of the Treasury announced Thursday that it will be taking over major aspects of administering the $1.7 trillion student loan portfolio from the Department of Education. This is good news. Most of the benefits from the shift derive from differences in the core competencies of the two departments. Treasury’s core focus is on finance, in particular collecting revenue in the form of taxes and making payments. Education’s focus is not finance, but rather education. Student loans are a much more natural fit for Treasury than for Education, and there are three groups that will benefit the most from this change: students, taxpayers and fans of federalism.
Students will benefit from a more streamlined aid application and loan repayment process. The aid application process relies on tax data to determine aid eligibility, and the new Repayment Assistance Plan (RAP) relies on adjusted gross income (AGI) to determine monthly payments. Education has direct access to none of this information, whereas Treasury, which houses the Internal Revenue Service, does. With some legislative updating, it is possible to transition the aid application process from the Free Application for Federal Student Aid to a simple checkbox on a student’s tax forms, which would constitute a radical simplification of the aid-application process.
