"Selling the loans to a private company would allow the administration to shrink the $1.6 trillion portfolio and scale back the federal government's role in student lending. The discussions, according to Politico, have included senior officials from the Education and Treasury Departments and could include an outside firm that would essentially appraise the student loan programs. Politico noted that the law does allow the Education Department to sell the loans, "but only if the transaction would not cost taxpayers money.""
"Selling off the loans raises a number of questions and issues for borrowers, in part because private loans don't have the same protections or benefits as federal loans. More than 45 million Americans have federal student loans. News of the discussions come as the administration is exploring ways to shut down the Education Department-an effort that would likely involve moving the portfolio to a different agency-and overhauling the student loan program itself in response to Congress's One Big Beautiful Bill Act, which passed over the summer."
The administration is weighing selling parts of the $1.6 trillion federal student loan portfolio to private companies to shrink the portfolio and scale back the federal role in student lending. Senior officials from the Education and Treasury Departments have been involved in discussions that could include an outside firm to appraise the programs. Law allows the Education Department to sell loans only if the transaction would not cost taxpayers money. Selling to private entities raises borrower concerns because private loans lack many federal protections and benefits. More than 45 million Americans hold federal student loans, and advocates criticized the proposal.
Read at Inside Higher Ed | Higher Education News, Events and Jobs
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