Senator Elizabeth Warren, a Massachusetts Democrat and the senior Democrat on the Senate Banking, Housing, and Urban Affairs Committee, during a congressional hearing in Washington, D.C., March 26, 2026. Aaron Schwartz/Bloomberg via Getty Images
Sen. Elizabeth Warren, a Democratic senator representing Massachusetts, is asking the Education Department to halt its transference of federal student aid activities to the Treasury Department in her latest endeavor to prevent the weakening of the agency.
This Thursday represents the one-year mark of Warren's "Save Our Schools" effort — her extensive investigation into President Donald Trump and Education Secretary Linda McMahon's strategies to close down the Education Department.
“Since the very beginning, the Trump administration has increased costs for those with student loans and tried to weaken our public schools,” Warren conveyed in a statement initially acquired by ABC News. “I’ve resisted at each point along the way, and I’ll continue to stand up for our students, educators, and families,” she stated.
Senator Elizabeth Warren, a Democrat from Massachusetts and ranking member of the Senate Banking, Housing, and Urban Affairs Committee, during a hearing in Washington, D.C., March 26, 2026.Aaron Schwartz/Bloomberg via Getty Images
Warren mentioned to ABC News last year that her campaign would employ a mixture of federal inquiries and supervision to take every possible action to push back and defend public schooling.
Since then, Warren's campaign has prompted the Government Accountability Office (GAO) to examine the department's dismantling, an internal oversight investigation into the Department of Government Efficiency's supposed "penetration" of the Office of Federal Student Aid's confidential data systems, as well as other legal objections to the Trump administration's restructuring of the agency.
Warren, along with leading Democratic senators within education-focused committees, submitted a letter to McMahon and Treasury Secretary Scott Bessent on Wednesday, imploring the officials to promptly "revoke" the interagency cooperation established in March.
"The Trump Administration is persistently moving ahead with unlawful Interagency Agreements (IAAs) breaking down the Education Department (ED)," the legislators noted in the letter, stating, "This most recent illegal plan from the Trump Administration risks capturing student loan recipients, students, and families within disorder and bureaucracy, all while American taxpayers are made to cover the expenses for Treasury to handle programs that ED is able to and should administer itself, likely costing increased money and overwhelming borrowers and families with unnecessary formalities."
The most recent agreement encompasses transmitting the nearly $1.7 trillion student loan collection to Treasury through a phased procedure to attain the financial aid initiatives.
“With the student loan holdings nearing $1.7 trillion and defaults approaching 25 percent, now is the ideal moment for a significant overhaul in how the federal government delivers and manages student loans,” Department of Education Press Secretary for Higher Education Ellen Keast communicated in a statement to ABC News. “We are assured that our alliance with the Treasury, an experienced and demonstrated fiduciary, will reinforce program management and serve American students, borrowers, and taxpayers more effectively,” Keast expressed.
The Democratic lawmakers are accusing the agencies of contravening the Consolidated Appropriations Act of 2026, which finances the management of federal student aid and student loan maintenance through the Department of Education. They claim that the various alterations to federal entities — including the substantial decreases in staff at both Education and Treasury — will also result in detriment to millions of Americans dependent on the specialized knowledge of federal student aid civil servants. According to an analysis by the Pew Research Center, the Trump administration decreased more than 40% of Education Department employees and nearly one-fourth of Treasury personnel in 2025.
Education Secretary Linda McMahon speaks during a “Fostering the Future Together Global Coalition Summit,” at the State Department, March 24, 2026, in Washington, D.C.Jacquelyn Martin/AP
Their letter communicated that transferring statutory student aid initiatives, like the Free Application for Federal Student Aid (FAFSA) and Pell Grants, is not only against the law but also liable to plunge the financial aid system into disarray.
McMahon has previously highlighted that she is not eliminating funds from federal initiatives and will proceed to execute all of the agency's "statutory responsibilities." A senior Department of Education official reported that the agency has significant authorization to relocate the services. According to the senior department official in a conversation with reporters, interagency agreements are a regularly utilized resource that Education has employed with other collaborating agencies over 200 times throughout the years.
Simultaneously, the Education Department has phased out Biden-era student loan repayment strategies, asserting it is to improve the process influencing beyond 40 million borrowers. A novel income-driven repayment plan will be available for borrowers on July 1 under the Working Families Tax Cuts Act signed into legislation by Trump last summer. According to the letter, the Democratic lawmakers are afraid that student loan borrowers currently have limited alternatives and guidance while boosting the number of borrowers in default and "economic hardship."
Conversely, Andrew Gillen of the libertarian think tank Cato Institute's Center for Educational Freedom stated the move should be good news for Americans.
"This will aid students by simplifying the aid application and student loan reimbursement processes and conserve taxpayer funds by diminishing losses on student loans," Gillen penned in a statement to ABC News.
Student loan advocates, such as Aissa Canchola Bañez, policy director at Protect Borrowers, condemned the interagency arrangement. Bañez described the declaration as irresponsible and careless, while insisting that Congress ensure the Treasury Department is furnished with the proper personnel to assist borrowers.
"Borrowers have been let down repeatedly for an extensive duration — they shouldn't be let down again by an agency that isn't equipped to protect them," she communicated in a statement to ABC News.
Sourse: abcnews.go.com