The Government Accountability Office has agreed to investigate the Trump administration's transfer of student loan services from the Department of Education to the Department of the Treasury. The investigation was triggered by Sen. Elizabeth Warren, D-Mass., and confirmed in a GAO letter first reviewed by ABC News.
The nonpartisan congressional watchdog said it intends to extend its existing probes into the Education Department's interagency agreements, adding to an ongoing investigation of the Education and Labor departments' partnership.
"The Trump administration is hurting students, families, and teachers by ripping important programs out of the Education Department and shipping them off to agencies with no expertise," Warren told ABC News. "This independent investigation is a major step forward in our work to protect students and save our schools," she said.
Warren and Sen. Bernie Sanders, I-Vt., had called on the GAO to conduct a comprehensive investigation into what they say is the Education Department illegally winding down its functions and shifting statutory offices to other agencies.
The Education Department announced in March that it was transferring the nation's nearly $1.7 trillion student loan portfolio to Treasury, saying the government's loan procurement services needed a "hard reset." Ellen Keast, the Education Department press secretary for higher education, told ABC News that the agency was confident in its Treasury partnership, describing Treasury as "an experienced and proven fiduciary."
The GAO plans to begin reviewing the transfer of student loan default collections from Education to Treasury this summer. The stakes are significant for borrowers in default, defined as those who have not made payments for at least 270 days. Once a loan enters default, it becomes eligible for mandatory collections that can affect credit scores and Social Security benefits.
A Labor Department spokeswoman pushed back on claims that the agency partnerships were creating problems, saying the agreements with the Education Department are "resulting in more efficient delivery of funded programs and alignment of workforce and industry needs." But Warren and Sanders have alleged the arrangements are adding unnecessary red tape and causing delays in adult education, family literacy, and career and technical education programs.
