11. Department of Education · Major · Needs Congress
Spin off Federal Student Aid into a new government corporation
Printed page 327 11. Department of Education
“The next Administration should completely reverse the student loan federalization of 2010 and work with Congress to spin off FSA and its student loan obligations to a new government corporation with professional governance and management.”
What has happened
- Attempted
ED and Treasury announced the Federal Student Assistance Partnership: Treasury takes operational responsibility for collecting defaulted federal student loan debt, with later phases to cover non-defaulted debt and "FSA's other functions" as practicable. It is an interagency agreement, not a spin-off — no government corporation exists, the $1.7 trillion portfolio stays on ED's books, and no enabling bill has been introduced.
- Attempted
Executive Order 14242 adopted the premise: the Department "is not a bank, and it must return bank functions to an entity equipped to serve America's students." The order names no entity and creates nothing.
Research log
What was searched, and what didn’t count as evidence
Research notes
- Negative search: no bill in the 119th Congress corpus creates a student-aid government corporation or otherwise spins FSA out of the Department; the student-loan bills on file concern interest rates, bankruptcy treatment, marriage penalties and servicing.
- The related ask of privatizing the lending programs themselves is #885; consolidating the loan programs is #887. Neither is satisfied by the Treasury agreement.
- Action
- create
- Object
- Office of Federal Student Aid (FSA)
- ID
- 824