Trump team weighs fining nearly 10 million US student loan defaulters, but only AFTER the midterms

The Treasury is weighing bringing in private debt collectors and seizing wages and benefits from borrowers who have missed payments. Rolling out such measures before the midterms is seen internally as politically toxic, with 2027 considered the more realistic start date. Critics warn the penalties would pile further debt onto borrowers already struggling under the pressure of rising living costs.

The Treasury took over the $1.7 trillion loan portfolio from the Education Department in September.

Treasury Secretary Scott Bessent's new portal promises defaulters 'a clearer path back to repayment'.

A Treasury official said it wants outside vendors to chase collections on defaulted loans.