H.R. 9609
Less Bureaucracy, Better Student Aid Act
Sponsor: Tim Walberg
1 cosponsor
Official summary
Written by the Congressional Research Service.
Less Bureaucracy, Better Student Aid Act
This bill transfers specified functions relating to federal student aid from the Department of Education (ED) to the Department of the Treasury.
Specifically, the bill transfers to Treasury all the functions and authorities exercised by ED related to servicing and collections of defaulted federal student loan debt, servicing of non-defaulted federal student loan debt, and other specified programs (e.g., Federal Pell Grants and Federal Direct Loans). ED and Treasury must jointly determine effective dates for these transfers in accordance with the bill's requirements. (On March 19, 2026, ED announced an interagency agreement with Treasury for Treasury to assume operational responsibility for collecting on defaulted federal student loans, while ED must maintain its statutory responsibilities.)
Additionally, the bill transfers to Treasury all personnel and appropriations related to the functions that are transferred under this bill.
The bill outlines the authority of the Office of Management and Budget (OMB) related to the functions that are transferred under this bill, including that OMB must ensure that this bill does not create a net increase in full-time equivalent employees at Treasury or ED. Further, OMB must certify compliance with the bill to specified congressional committees.
The transfer of these functions does not affect any suits, proceedings, or applications for benefits, services, licenses, permits, certificates, or financial assistance that are pending on the date of this bill's enactment.
The bill also terminates the authority to exempt delinquent or defaulted federal student loans from the Debt Collection Improvement Act.
Text of the bill
(a) Legal documents. All orders, determinations, rules, regulations, permits, grants, loans, contracts, agreements, certificates, licenses, and privileges— shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, the Secretary of the Treasury, any other authorized official, a court of competent jurisdiction, or operation of law.
(1) that have been issued, made, granted, or allowed to become effective by the President, any Federal agency or official thereof, or by a court of competent jurisdiction, in the performance of any function that is transferred by this Act; and
(2) that are in effect on the effective date of such transfer (or become effective after such date pursuant to their terms as in effect on such effective date),
(b) Proceedings. This Act shall not affect any proceedings or any application for any benefits, service, license, permit, certificate, or financial assistance pending on the date of the enactment of this Act before the Department of Education (with respect to functions transferred by this Act). Such proceedings and applications shall continue, orders shall be issued in such proceedings, appeals shall be taken therefrom, and payments shall be made pursuant to such orders, as if this Act had not been enacted, and orders issued in any such proceeding shall continue in effect until modified, terminated, superseded, or revoked by a duly authorized official, by a court of competent jurisdiction, or by operation of law. Nothing in this subsection shall be considered to prohibit the discontinuance or modification of any such proceeding under the same terms and conditions and to the same extent that such proceeding could have been discontinued or modified if this Act had not been enacted.
(c) Suits. Except as provided in subsection (e)—
(1) this Act shall not affect suits commenced before the date of enactment of this Act; and
(2) in all such suits, proceeding shall be had, appeals taken, and judgments rendered in the same manner and with the same effect as if this Act had not been enacted.
(d) Nonabatement of actions. No suit, action, or other proceeding commenced by or against the Department of Education (with respect to the functions transferred by this Act), or by or against any individual in the official capacity of such individual as an officer or employee of the Department of Education (with regard to functions transferred by this Act), shall abate by reason of the enactment of this Act.
(e) Continuance of suits. If, before the date on which a transfer of a function under this Act takes effect, the Secretary of Education or any officer or employee of the Department of Education in the official capacity as such an officer or employee is party to a suit relating to the function, then such suit shall be continued and the Secretary of the Treasury, or other appropriate official of the Department of the Treasury, shall be substituted or added as a party.
(f) Administrative procedure and judicial review. Except as otherwise provided by this Act, any statutory requirements relating to notice, hearings, action upon the record, or administrative or judicial review that apply to any function transferred by this Act shall apply to the exercise of such function by the Secretary of the Treasury, and other officers of the Department of the Treasury, to which such function is transferred by this Act.