The Bureau of the Fiscal Service is taking over collection of 7.8 million defaulted federal student loans totaling $179 billion under a March 2026 agreement. This transfer allows Treasury to add its own collection fees to borrower debts, creating a potential second layer of costs. Involuntary collections like wage garnishment remain paused, but the new structure changes how these debts are managed. A previous 2015 pilot showed Treasury resolving fewer loans than private collectors, raising questions about the program's effectiveness.
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