Reverse 2010 loan federalization; spin FSA into a government corporation
Mandate would reverse Direct Loan federalization, create a professionally governed federal student-loan corporation, assign collections to Treasury, and end using the portfolio as a campaign fund for forgiveness.
Mandate
Mandate Ch. 11 (Education) — Office of Federal Student Aid: completely reverse student loan federalization of 2010 and spin off FSA and loan obligations to a new government corporation with professional governance/management; statutory charge to preserve portfolio for taxpayers and students; Treasury manages collections/defaults; end practice of treating portfolio as campaign fund; borrowers expected to repay.
Undo plan
1) Keep Direct Loans if privatization raises borrower costs or reduces servicer accountability.
2) Reform FSA governance and servicing SLAs without abandoning public lending.
3) Codify forgiveness only via clear congressional authorization.
4) Strengthen borrower defenses against fraud without open-ended political discharge.
5) Verify: default rates, servicing error rates, and budget scoring of any spin-off.