Warren, Sanders, Wyden, Murray, Baldwin Blast New Trump Admin Attempt to Dismantle Education Department, Call for Immediate End to Illegal Transfer of Student Loans to Treasury

Warren, Sanders, Wyden, Murray, Baldwin Blast New Trump Admin Attempt to Dismantle Education Department, Call for Immediate End to Illegal Transfer of Student Loans to Treasury

Committee Ranking Members argue that the scheme "will set the stage for more dysfunction in a federal student aid system that the Trump Administration has already made more expensive and confusing to navigate"

Text of Letter (PDF)

Washington, D.C. - U.S. Senators Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Ron Wyden (D-Ore.), Patty Murray (D-Wash.), and Tammy Baldwin (D-Wis.) pressed Secretary of Education Linda McMahon and Secretary of the Treasury Scott Bessent to rescind their plans to move the administration of federal student loans to the Treasury Department (Treasury), the latest move in the Trump administration's attempts to dismantle the Department of Education (ED).

The lawmakers are the Ranking Members of the Senate Banking, Housing, and Urban Affairs Committee; Senate Health, Education, Labor, and Pensions Committee; Senate Finance Committee; Senate Appropriations Committee; and Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies.

"This latest illegal scheme from the Trump Administration threatens to trap student loan borrowers, students, and families in chaos and bureaucracy, all while American taxpayers are left to foot the bill for Treasury to administer programs that ED can and should administer itself," wrote the lawmakers.

Congress recently reaffirmed on a bicameral, bipartisan basis that ED has no authority to transfer its statutory responsibilities to other agencies, stating that doing so would "create inefficiencies, result in additional costs to the American taxpayer, and cause delays."

Contrary to that directive, ED's most recent interagency agreement (IAA) transfers its responsibilities of managing student loans and federal student aid to Treasury, without Congressional authorization. Previous IAAs transferred ED's management of career and technical education programs, adult education grant programs, along with dozens of programs for early childhood, elementary, secondary, and postsecondary education out of ED.

"The Trump administration's record of haphazard decision making and utter disregard for the actual issues facing students, families, and student loan borrowers suggests that this IAA will be implemented in a way that leaves borrowers with limited options and little to no guidance while increasing the number of borrowers in default and economic distress," warned the lawmakers.

The senators argued that the first phase of the IAA is likely to worsen the student loan default crisis, because it tasks Treasury - an agency with no experience in student loan administration - with collecting on defaulted student loan debt and helping borrowers exit default. They cited the Treasury Department's reductions in force as reason to doubt the success of the new arrangement, in addition to a pilot study where Treasury was made responsible for collections and loan rehabilitation for several thousand student loan borrowers but only successfully completed rehabilitations for eight.

Further, the senators argued that the second and third phases of the IAA - in which Treasury will be tasked with potentially managing the entire federal student loan portfolio and administering the FAFSA form - are illegal and likely to throw the financial aid system into further disarray.

"Treasury's lack of expertise in the federal student aid system could be disastrous for the implementation of the latter phases of the IAA, as the federal student aid system is highly complex and administrative errors could endanger access to financial aid or statutory debt cancellation," wrote the senators. "This ill-advised plan also ignores the laws of Congress."

Previous IAAs have cost ED over $1 million in extra program costs and resulted in weeks-long delays in grant disbursements, harming students and schools.

"[I]t is reckless for ED to enter into another IAA with no information or clarity on the cost," said the senators.

"The ED-Treasury IAA will set the stage for more dysfunction in a federal student aid system that the Trump Administration has already made more expensive and confusing to navigate...We call upon you to rescind these IAAs immediately," concluded the lawmakers.

The senators asked Secretary McMahon and Secretary Bessent to provide details on the cost of transferring student loan administration to Treasury, basic information on the staff responsible for and the timing of the IAA, and how Treasury will be held accountable for poor performance in administering its new student loan responsibilities by April 15, 2026.

Senator Warren has led the fight to make our higher education system more affordable, cancel student loan debt, and hold student loan servicers accountable for incompetence and malfeasance. She launched the Save Our Schools campaign in a coordinated effort to fight back against President Trump's attempts to abolish the Department of Education.

• On March 11, 2026, following a request from Senator Elizabeth Warren (D-Mass.), the Government Accountability Office, an independent government watchdog, opened an investigation into the Department of Education's transfer of grant programs to the Department of Labor.
• On February 23, 2026, Senators Elizabeth Warren and Bernie Sanders, along with Representative Ayanna Pressley, released a response from the Department of Education to their November letter regarding a potential sale of the federal student debt portfolio. In the response, ED confirms for the first time publicly that they are weighing a sale of the federal student loan portfolio.
• On February 19, 2026, Senators Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) pushed Education Secretary Linda McMahon on concerns that the U.S. Department of Education is apparently obstructing Congressional efforts to hold federal student loan servicers accountable for underperformance.
• On February 2, 2026, Senator Warren released a new report revealing the findings of their investigation into how private student loan lenders will reap the benefits from cuts to federal student loan access enacted in Republicans' Big, Beautiful Bill (OBBBA). The report is the first Congressional analysis of the impacts of the OBBBA's student loan restrictions on the private lending market.
• On January 22, 2026, Senators Elizabeth Warren, Jeff Merkley (D-Ore.), Sheldon Whitehouse (D-R.I.), and Tim Kaine (D-Va.) led their Senate colleagues in demanding answers from Trump Education Secretary Linda McMahon about the Trump Administration's proposal to eliminate affordable student loan repayment options for millions of Americans.
• On December 8, 2025, Senator Warren led her colleagues in writing to the federal student loan servicers to ensure they are providing borrowers with the customer service they deserve in the wake of the Trump administration's student loan policy whiplash. The senators sent letters to MOHELA, Nelnet, EdFinancial, Maximus, and CRI.
• On December 1, 2025, Senator Warren published an op-ed in USA Today calling for Secretary of Education Linda McMahon to resign following the recent news that President Trump and Secretary McMahon plan to further dismantle the Department of Education (ED).
• On November 24, 2025, Senator Warren pushed for an expanded investigation into the Trump administration's attempts to dismantle ED and whether its recent decision to transfer many of ED's responsibilities to four other agencies violates federal law.
• On November 17, 2025, Senator Warren led over 40 of her colleagues in a letter urging Secretary of Education Linda McMahon and Secretary of the Treasury Scott Bessent to immediately end any plans to sell or transfer the federal student loan portfolio to the private market.
• On November 10, 2025, Senator Warren led her colleagues in a letter urging the Trump administration to use the IRS's existing legal authorities to stop the looming "tax bomb" facing borrowers who obtain income-driven repayment (IDR) discharges of their student loan debt.
• On October 15, 2025, Senator Warren and Representative Ayanna Pressley (D-Mass.) led 70 members of Congress in a letter calling on the Trump administration to address the ongoing and unprecedented wave of student loan delinquencies and defaults, which threatens the financial stability of millions of people and could have disastrous effects on the American economy.
• On September 19, 2025, following a push by Senator Warren and nine other senators, the Acting Inspector General of the U.S. Department of Education agreed to open an investigation into DOGE's infiltration of internal systems, including the scope of its access to sensitive student loan borrower information and its impact on borrowers' rights and privacy.
• On August 26, 2025, Senator Warren led colleagues in sending a follow-up letter to Education Secretary Linda McMahon condemning the Department of Education for deliberately hiding the "Submit a Complaint" button on the Office of Federal Student Aid's website, firing employees responsible for providing customer service to borrowers and families and misleading Congress about the scope of these firings.
• On August 7, 2025, Senator Warren publicly released Secretary of Education Linda McMahon's response to the senator's 60+ questions and pressed for additional information. Senator Warren announced that she would refer certain matters where the Department has proved uncooperative to the Government Accountability Office and the Education Department's Inspector General.
• On August 4, 2025, Senator Warren led eight Senators in pressing major private student loan lenders on their plans to serve the incoming surge of borrowers who will be pushed to the industry because of Republicans' recently passed "Big, Beautiful Bill."
• On July 17, 2025, Senator Warren released a new 23-page report, "Education At Risk: Frontline Impacts of Trump's War on Students," highlighting warnings from 11 major national education and civil rights organizations on the impact of the Trump Administration's dismantling of the Department of Education (ED), slashing support to millions of American students, primary and secondary school teachers, administrators, parents, and student loan borrowers.
• On July 15, 2025, Senators Warren and Sanders, along with Senate Democratic Leader Chuck Schumer, sent a letter to Secretary of Education Linda McMahon, urging her to reverse the interest hike on student loan borrowers in the SAVE forbearance.
• On July 14, 2025, Senator Warren joined a letter to the director of the Office of Management and Budget, Russ Vought, and Secretary of Education, Linda McMahon, demanding that the Department of Education stop blocking nearly $7 billion in funds for K-12 schools, including for afterschool programs.
• On July 3, 2025, Senator Warren led her colleagues in submitting an amicus brief for NAACP v. US, arguing to the United States District Court District of Maryland that President Trump's attempts to dismantle the Department of Education violate separation of powers and lack constitutional authority.
• On June 10, 2025, Senator Warren met with Secretary of Education Linda McMahon and delivered over 1,000 letters to McMahon that the senator had received from people in all 50 states who were worried about the Secretary's efforts to dismantle the Department of Education.
• On June 9, 2025, Senator Warren led her colleagues in pushing the Acting Inspector General of the Department of Education to open an investigation into new information obtained by her office, revealing that DOGE may have gained access to two FSA internal systems, in addition to sensitive borrower data.
• On May 20, 2025, Senator Warren and 27 other senators pushed for full funding for the Office of Federal Student Aid.
• On May 14, 2025, Senator Warren led a Senate forum entitled "Stealing the American Dream: How Trump and Republicans Are Raising Education Costs for Families," highlighting the consequences of Secretary Linda McMahon's reckless dismantling of the Department of Education and President Trump's "big, beautiful bill" for working- and middle-class students and borrowers.
• On May 13, 2025, Senator Warren agreed to meet with Education Secretary Linda McMahon and promised to bring questions and stories from Americans across the country to highlight how the Trump administration's attacks on education are hurting American families.
• On May 6, 2025, Senator Elizabeth Warren highlighted the consequences of President Trump and Secretary Linda McMahon's reckless dismantling of the Department of Education for American families in a Senate forum.
• On April 24, 2025, Senator Warren launched a new investigation into the harms of President Trump's attacks on the Department of Education, seeking information on the impact of the Trump administration's actions from the members of twelve leading organizations representing schools, parents, teachers, students, borrowers, and researchers.
• On April 10, 2025, following a request led by Senator Warren, the Department of Education's Acting Inspector General agreed to open an investigation into the Trump administration's attempts to dismantle the Department of Education.
• On April 2, 2025, Senators Elizabeth Warren and Mazie Hirono, along with Senate Democratic Leader Chuck Schumer, sent a letter to Secretary of Education Linda McMahon regarding the Department of Government Efficiency's proposed plan to replace the Department of Education's federal student aid call centers with generative artificial intelligence chatbots.

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