Less Bureaucracy, Better Student Aid Act
- Bill Number
- H.R. 9609
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Status
- Introduced
- Latest Action
- 2026-07-09: Referred to the Committee on Education and Workforce, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-07-10T10:23:22Z
AI-Generated Summary
Purpose
This legislation aims to consolidate the management of federal student loans, related debt, and student aid eligibility policies under the Department of the Treasury, rather than the Department of Education. The goal, as stated in the short title, is to reduce bureaucracy in student aid administration.
Key Provisions
- Transfer of Functions: All responsibilities for servicing defaulted and non-defaulted federal student loans (including collections, repayments, consolidations, and credit reporting) are moved to the Treasury Department. This also includes broader student aid programs such as Pell Grants, work-study, Direct Loans, and Perkins Loans.
- Phased Implementation: Transfers occur in stages, with effective dates set jointly by the Secretaries of Education and Treasury. Defaulted loan functions transfer first, followed by non-defaulted loans, and then remaining aid functions.
- Authority and Resources: The Treasury Secretary gains all prior legal authorities from the Education Secretary for these tasks. Personnel, contracts, records, and unspent funds transfer accordingly, with no net increase in federal full-time employees overall.
- Debt Collection Changes: Federal student loans lose their exemption from standard federal debt collection rules starting with the first transfer phase.
- Continuity Measures: Existing contracts, legal proceedings, and benefits applications continue without interruption. References to the Education Department in other laws shift to the Treasury Department.
Significant Changes to Existing Law
- Reassigns core student aid oversight from the Department of Education (including its performance-based organization) to the Department of the Treasury.
- Ends the prior exemption for student loan debt under the Debt Collection Improvement Act, requiring delinquent loans to follow standard collection processes.
- Updates all statutory references and delegations to reflect the new managing agency.
Potential Impacts
- Government Agencies: The Department of Education loses major operational roles in student aid, while the Department of the Treasury assumes expanded responsibilities for loan servicing and grant programs. The Office of Management and Budget oversees personnel adjustments to avoid staffing growth.
- Citizens: Borrowers may experience changes in loan servicing and repayment processes, though existing agreements and disputes remain in effect during transition.
- International Relations: No direct effects identified.
Main Stakeholders Affected
- Federal student loan borrowers and applicants for aid programs.
- Educational institutions and lenders participating in federal student aid.
- The Department of Education and Department of the Treasury.
- The Office of Management and Budget.
Notable Legal, Constitutional, or Political Implications
- Ensures legal continuity through savings clauses that preserve ongoing suits, orders, and proceedings.
- Requires compliance certifications to congressional committees on education and health policy.
- Represents a structural shift in executive branch organization, with the Treasury Secretary able to delegate tasks but retaining ultimate responsibility. No constitutional issues are addressed in the bill itself.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-07-09: Referred to the Committee on Education and Workforce, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2026-07-09: Referred to the Committee on Education and Workforce, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2026-07-09: Introduced in House
- 2026-07-09: Introduced in House
Bill Versions
- Less Bureaucracy, Better Student Aid Act — issued 2026-07-09 — PDF (13 pages)