Trump administration considers sale of federal student loan debt

[BumRushDaShow]

Source: Politico

10/07/2025 05:00 AM EDT


Trump administration officials are exploring options to sell off parts of the federal government’s $1.6 trillion student loan portfolio to the private market, according to three people familiar with the matter. The discussions have taken place among senior Education Department and Treasury Department officials and have focused on selling high-performing portions of the government’s massive portfolio of student debt, which is owed by about 45 million Americans.

Trump administration officials have also discussed the issue with finance industry executives, including potential buyers of the debt. The talks earlier this year briefly involved DOGE officials embedded at the Education Department and elsewhere, but they are being led by senior political appointees, according to the people familiar with the conversations who were granted anonymity to discuss internal deliberations.

The idea reflects an appetite from administration officials to shrink the size of student loan debt on the government’s balance sheet. It aligns with broader Republican efforts to scale back federal student lending and expand private-sector involvement in the economy.

Selling federal student loan debt raises significant logistical and legal concerns, adding new uncertainty for borrowers. Key questions include what happens to borrower protections—typically more generous than in the private market — and whether the government would continue guaranteeing any of the loans. The federal government enjoys more powerful debt-collection abilities — such as garnishing tax returns or Social Security benefits — than do private lenders.

Read more: https://www.politico.com/news/2025/10/07/trump-administration-selling-federal-student-loan-portfolio-00595456?nid=0000014f-1646-d88f-a1cf-5f46b7bd0000&nname=playbook&nrid=0000014e-f10d-dd93-ad7f-f90d182f0002

[bucolic_frolic]

1. Wall Street Repo Lobbyists are drooling

Impound your car and lien your house. Unleash private enterprise and make more jobs feeding off the smart people.

[C_U_L8R]

2. I can't stand the smell of corruption in the morning

It smells like… Trump.

[Diraven]

12. Trump will try to take a cut

He thinks he's entitled to sell off the US for his own personal profit since he's king now.

[eppur_se_muova]

3. The DoE purchased much of that debt ***FROM*** private guarantors/lenders. I know, they bought mine.

The Guaranteed Student Loan Progarm was *ostensibly* created to help people afford a college education. But of course the 'advisors' who helped write the legislation all came from the financial industry, and knew they would be going back there to seek later employment, so they engineered the whole program to be a big Welfare operation for the lenders -- a guaranteed income stream for banks, but guaranteed debt for borrowers, who can never escape, not even by bankruptucy.

Publicly, it was presented as a case of the lenders taking on some risk they would not have taken on without gov't assistance and guarantees, benefiting the borrowers and making the program 'safe' with no cost to taxpayers. In reality, there was never any real risk for lenders -- unpaid loans got sold over and over between different collection agencies, and eventually, the DoE became the purchaser of last resort -- so taxpayers got the bill anyway, and lenders collected more in fees than the loan program ever cost them.

So ... now they want to sell uncollected debt back to the companies who were happy to dump it on the DoE ?? Lots of luck with that. Any remaining uncollected debt will probably remain unpaid until the borrowers are dead -- and nothing left of their bankrupt estate to collect.

[popsdenver]

15. Bingo

then when the government got it, and realized that much of it was a giant scam pulled on students, they passed a quick law that the students couldn't go bankrupt on the loan.......now, the private market wants it back since the students can't go bankrupt on it/??????????????

One of the biggest scams ever pulled on students................

[Buddyzbuddy]

4. If that were to occur, would borrowers then be able to discharge the debt

through bankruptcy?

[North Coast Lawyer]

8. probably not

Probably not. Private student loans that do exist today are not dischargeable absent undue hardship (a very high burden to meet). However, statutes of limitation defenses are available re private student loans.

[Buddyzbuddy]

10. Thank you. Our relative will be disappointed.

[maxsolomon]

5. And you got big mad that Biden couldn't forgive all of your debt, kids.

You don't miss your water till your well goes dry.

[yellow dahlia]

6. It's like they are looking at everything within the govt,

and saying - how can we fuck this up?

Oh yeah - and how can we privatize this for our private equity vulture pals?

[BaronChocula]

7. How many of those borrowers

Weren't "enthusiastic" and stayed home or worse, voted for the child molester.

[Lemon Lyman]

9. Yup

Sure hope the "PJB didn't do enough of my loans" -people are happy now.

[Diraven]

11. This can only hurt students

This will only hurt students. A private company will do everything possible to make profit off the debt. Meaning the borrowers will end up paying even more.

[Hayabusa]

13. Man, I do NOT want to have to dip into the rainy day fund

but if they sell my loan to a private company, I just might have to.

I wonder what this will do for those on track for Public Student Loan Forgiveness, like me, too.

[pecosbob]

14. Why do I get the feeling that this was the plan all along?

[popsdenver]

16. Merger of Government and Corporations is

FASCISM...........

It is in our faces right now........