Feds would sell off student debt under Trump administration proposal: report

The Trump administration is considering selling some of the government’s $1.6 trillion student loan portfolio to private buyers, according to a new report.

Top Education and Treasury Department officials have discussed selling high-performing portions of the giant portfolio, which covers loans taken out by roughly 45 million Americans, Politico reported Tuesday, citing three sources familiar with the matter.

Trump officials have also talked about the potential sale with finance industry executives, including some potential buyers, according to the outlet.

The White House, Education Department and Treasury Department did not immediately respond to The Post’s requests for comment.

The new idea reflects the Trump administration’s wish to wipe student debt off of government ledgers and complements longstanding GOP goals of reducing student lending and increasing the role of the private sector in the economy, Politico noted.

Experts have warned that private lenders might offer borrowers weaker protections than the government — unlike the feds, they don’t have immunity from legal action or unlimited time to collect loans.

Still, the sale could be Trump’s next step in his path to eradicate the Education Department. The president signed an executive order aimed at closing it in March.

The Education Department could sell the debt after consulting with Treasury officials, but only if the plan congressional approval and will not cost taxpayers any money, according to Politico.

Talks of a potential sale have been taking place for months, sources told the outlet. 

Earlier this year, the discussions involved Department of Government Efficiency (DOGE) officials installed at the Education Department, but senior Trump staffers are now leading the talks, according to the report.

“The Trump administration is committed to analyzing all aspects of the federal student loan portfolio,” a senior White House official told Politico. 

“Unlike the previous administration, we are focused on ensuring the long-term health of the portfolio for the benefit of both students and taxpayers.”

Earlier this year, the Trump administration restarted student debt collection for the first time since March 2020, reversing Biden-era loan forgiveness policies.

Trump officials are reportedly weighing whether to bring in an external consulting firm or bank to analyze the student debt portfolio and how it would be valued on the private market. 

During Trump’s first term, the Education Department hired consulting firms to take a look at the portfolio, but they ultimately found that student loan debt was worth far less than government officials had expected.