President Trump's Transfer of Student Loans to Treasury Raises Concerns Over Debt Collection Practices
President Trump is transferring the management of federal student loans from the Department of Education to the Treasury Department. This move will involve defaulted borrowers being managed through the Treasury's 'Cross-Servicing program,' which employs private contractors for debt collection. Notably, two of these contractors, Pioneer Credit Recovery and Transworld Systems, have previously faced legal action for 'misleading' and 'abusive' practices. The shift comes as student-loan defaults reach record highs, with over 10 million borrowers in default or delinquency. The Department of Education has paused involuntary collections, such as wage garnishment, while preparing for repayment changes. However, the timeline for resuming collections and the extent of involvement of these private collectors remain unspecified. 
