"The Treasury took over about $80 million worth of defaulted student-loan accounts during the 2015 pilot, which aimed to understand the challenges faced by defaulted borrowers."
"Operational challenges with private debt collection agencies included difficulties in reaching borrowers and collecting correct payment amounts, which the pilot intended to investigate."
"One year into the pilot, the Treasury had collected 4.1% of its borrowers' loans, compared to 5.5% in the control group, indicating significant challenges ahead."
The Department of Education is transferring millions of student-loan accounts to the Treasury, starting with defaulted borrowers. This move is part of a broader goal to dismantle the Department of Education. The Treasury previously attempted to manage federal student loans in 2015, but the pilot program faced operational challenges and was ultimately unsuccessful. Defaults are at a record high, with about 9 million borrowers in default, making this transition critical for those affected.
Read at www.businessinsider.com
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