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) Termination of authority To exempt student loans from the Debt Collection Improvement Act. Beginning on the effective date of the transfers required under paragraph (1) of section 2(a) (as determined in accordance with section 2(b)), delinquent or defaulted Federal student loan debt may not be subject to an exemption under paragraph (2)(B) of section 3711(g) of title 31, United States Code, from the requirement under paragraph (1) of such section.
(b) Definitions. In this Act:
(1) Delinquent or defaulted. The term delinquent or defaulted, when used with respect to student loan debt, means debt that is considered delinquent or in default in accordance with the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
(2) Student loan debt. The term student loan debt means any debt under part B, D, or E of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), or any debt that arises from a Health Education Assistance Loan as provided in part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.), that is assigned to or otherwise held by the Secretary of Education.