The Trump administration has initiated a significant overhaul of the US student loan system, valued at $1.7 trillion, by transferring the management of roughly $180 billion in defaulted loans to the US Treasury Department. This decision affects more than 9 million borrowers and is part of a broader strategy to reshape federal loan oversight. While officials assert that the Treasury is better suited for debt collection, concerns have been raised about its limited experience in providing flexible repayment solutions that could aid borrowers in recovering from default. Education Undersecretary Nicholas Kent emphasized the need for effective loan rehabilitation strategies, acknowledging the challenges faced in the past. A previous pilot program in 2015 revealed the complexities of managing student loan defaults, with only eight borrowers successfully rehabilitated out of over 5,700 cases. As the administration seeks to streamline repayment processes, the effectiveness of these changes remains to be seen.