Treasury Department taking over student loans: What to know

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FILE - A statue of Albert Gallatin, a former U.S. Secretary of the Treasury, stands in front of The Treasury Building in Washington, D.C. (Photo by Robert Alexander/Getty Images)

WASHINGTON - Student loan borrowers who have defaulted on their accounts will now be managed by the Treasury Department, according to a new agreement announced on Thursday. 

What they're saying:

"The Federal Student Assistance Partnership marks an intentional and historic step toward breaking up the Federal education bureaucracy and dramatically improving the administration of Federal student aid programs that millions of American students, families, and borrowers rely on to access higher education," said U.S. Secretary of Education Linda McMahon.

Here’s what student loan borrowers will need to know: 

Which loans are being taken over by the Treasury Department? 

The Treasury Department will take over management of accounts whose payments are months behind, or in default. 

By the numbers:

There are 9.2 million Americans who are in default on their student loans, which adds to be around $180 billion, or 11% of the government’s $1.7 trillion student loan portfolio. 

Do borrowers need to do anything? 

For now, no. The administration plans to work with the same loan servicer and borrowers can continue making payments the same way. 

What you can do:

Borrowers who are in default can check the status of their loans by visiting myeddebt.ed.gov.

Will my wages be garnished if I’m in default?

Not yet.

Involuntary collections on federal student loans are currently on hold. 

The Trump administration announced in February that it is delaying plans to withhold pay from student loan borrowers who are in default.