No—the March 2025 announcement did not complete a transfer of federal student loans to the Small Business Administration (SBA). The Education Department later said a court injunction barred implementation of that directive. A separate agreement announced in March 2026 named the Treasury Department for initial operational work on defaulted loans, with possible later support for non-defaulted loans. It did not announce a wholesale transfer of all student-loan operations.
What did Trump announce about student loans and the SBA?
On March 21, 2025, President Donald Trump said the SBA would handle federal student loans as part of the administration’s effort to move functions out of the Department of Education. The announcement described an intended role for the SBA; it was not evidence that the portfolio had already been handed over. The executive order signed the day before did not provide a timeline or detailed transfer instructions, according to the Associated Press report.
Trump said the loans would be “serviced much better than they have in the past,” as reported by the AP. That was his stated expectation, not an independently established outcome.
Did the SBA take over federal student loans?
The Education Department’s FAQ says a preliminary injunction in State of New York v. McMahon barred the department from carrying out the March 21, 2025 directive to transfer management of federal student loans out of Education. The FAQ says the injunction remained in effect during the litigation described there and that the agency defendants appealed. It does not establish a final litigation outcome. Read the Education Department’s FAQ.
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So the accurate distinction is: Trump announced an SBA plan in 2025; the department later reported that an injunction blocked implementation of that directive; and a later, separate partnership involved Treasury, initially for defaulted-loan operations. The Treasury arrangement does not show that SBA took over the portfolio or resolve the litigation over the 2025 directive.
Who manages federal student loans now?
Federal student loan servicing and agency-level policy changes are not the same thing. Individual borrowers should use their account on StudentAid.gov and the official contact information for the servicer shown there. Do not infer that your servicer changed—or that you must take a new action—from the 2025 SBA announcement.
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In March 2026, the Education and Treasury departments announced a Federal Student Assistance Partnership. Its initial operational focus is collecting defaulted federal student loan debt and supporting borrowers returning to repayment. The departments described possible later phases involving non-defaulted debt, subject to what is practicable and permitted by law. Education characterized the agreement as “an intentional and historic step” toward breaking up federal education bureaucracy; Treasury Secretary Scott Bessent said Treasury had operational and financial expertise to help manage the work. These are the officials’ descriptions of the partnership, not independent assessments of its effects. See the agencies’ announcement.
What the announced Treasury partnership covers
The agencies’ March 2026 announcement said Education’s portfolio was nearly $1.7 trillion, with fewer than 40 percent of borrowers in repayment and almost 25 percent in default. Those are Education Department figures published with the partnership announcement. Federal Student Aid separately reported that, as of March 2026, about nine million recipients with $220 billion in loans were in default—more than 13 percent of its $1.64 trillion federally managed portfolio. The figures use different definitions and reporting presentations; each should be read with its stated date and source. Federal Student Aid’s March 2026 figures and partnership information.
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A June 9, 2026 Congressional Research Service summary describes three phases: Treasury servicing defaulted loans; a potential assessment of administrative servicing operations for non-defaulted debt; and review of programmatic and policy requirements. CRS says the agreement’s timeline was unspecified. The later phases are therefore not a date-certain transfer of all non-defaulted loans. Read the CRS summary.
What is the Defaulted Loans Support Center?
On September 30, 2026, Education and Treasury announced an online Defaulted Loans Support Center for borrowers with defaulted federal loans. The agencies said borrowers can use it to review options, apply for rehabilitation or consolidation, make payments, and review repayment and discharge options while remaining on StudentAid.gov. It is specifically for defaulted-loan support; its launch does not establish that every borrower’s loan or servicer has changed.
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Education reported that beta users gave positive feedback: 89 percent said the application was easy to complete, 86 percent understood what to do next, and 84 percent said the time required was reasonable. The announcement excerpt does not state the sample size, so those percentages describe agency-reported beta feedback, not all borrowers. See the support-center announcement.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should you do if your student loan servicer changes?
A servicing transfer is account-specific. Federal Student Aid says transfer information may take time to appear and advises borrowers to contact the new servicer if displayed details look incorrect. Use official federal channels and verify contact information through your StudentAid.gov account, rather than relying on unsolicited messages claiming a transfer requires immediate payment or personal information.
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- Check your account: Sign in at StudentAid.gov and review the servicer information attached to your loan.
- Allow for an update delay: Transfer details may not appear immediately. Check again if an announced change is not yet reflected.
- Contact the listed new servicer about errors: Ask it to review incorrect balances, payment history, or other transferred information.
- Keep records: Save account statements and payment confirmations while the transition is being resolved.
Federal Student Aid’s guidance on servicer transfers explains what to check and how to respond to apparent errors: servicer information and transfer guidance.
Is the Perkins Loan servicing change part of the SBA plan?
No. Federal Student Aid separately announced that servicing for federally held Perkins Loans would transition from ECSI to GCR, with completion anticipated by December 1, 2026. That is a specific Perkins servicing change, not evidence of a general SBA takeover or the same thing as the Education-Treasury partnership. Read the Perkins Loan servicing update.
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