AASCU Federal Highlights – March 2026

ED Announces Interagency Agreement with Treasury, Federal Student Assistance Partnership

Today, ED and the U.S. Department of the Treasury announced a new interagency agreement (IAA), the Federal Student Assistance Partnership, aimed at improving the administration of federal student aid programs and addressing challenges in the student loan system. The federal student loan portfolio currently totals about $1.7 trillion, with fewer than 40% of borrowers actively in repayment and roughly one-quarter in default. Under the agreement, Treasury will initially take on responsibility for collecting defaulted loans and supporting efforts to help borrowers return to repayment, with the possibility of expanding its operational role over time.

ED officials say the partnership is intended to strengthen oversight, improve efficiency, and better serve borrowers and taxpayers by drawing on Treasury's financial and operational expertise. The agencies plan to roll out the changes in phases and will provide ongoing updates to stakeholders, including students, families, and institutions. The initiative builds on broader efforts to coordinate federal education and workforce programs across agencies and to streamline the delivery of financial aid.

It's being reported that administration of the FAFSA is to stay within the Department of Education. Loans within the Federal Family Education Loan (FFEL) Program that are still under ED's current jurisdiction will be moved over to Treasury. AASCU is also aware that this IAA should not affect the timelines for involuntary collections under Administrative Wage Garnishment and the Treasury Offset Program. AASCU will continue to monitor and report on these developments as they arise.