Trump administration considers sale of federal student loan debt [View all]
Source: Politico
10/07/2025 05:00 AM EDT
Trump administration officials are exploring options to sell off parts of the federal government’s $1.6 trillion student loan portfolio to the private market, according to three people familiar with the matter. The discussions have taken place among senior Education Department and Treasury Department officials and have focused on selling high-performing portions of the government’s massive portfolio of student debt, which is owed by about 45 million Americans.
Trump administration officials have also discussed the issue with finance industry executives, including potential buyers of the debt. The talks earlier this year briefly involved DOGE officials embedded at the Education Department and elsewhere, but they are being led by senior political appointees, according to the people familiar with the conversations who were granted anonymity to discuss internal deliberations.
The idea reflects an appetite from administration officials to shrink the size of student loan debt on the government’s balance sheet. It aligns with broader Republican efforts to scale back federal student lending and expand private-sector involvement in the economy.
Selling federal student loan debt raises significant logistical and legal concerns, adding new uncertainty for borrowers. Key questions include what happens to borrower protections—typically more generous than in the private market — and whether the government would continue guaranteeing any of the loans. The federal government enjoys more powerful debt-collection abilities — such as garnishing tax returns or Social Security benefits — than do private lenders.
Read more: https://www.politico.com/news/2025/10/07/trump-administration-selling-federal-student-loan-portfolio-00595456?nid=0000014f-1646-d88f-a1cf-5f46b7bd0000&nname=playbook&nrid=0000014e-f10d-dd93-ad7f-f90d182f0002
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