Student loans could be managed by the Small Business Administration

President Donald Trump said last week that federal student loans would “immediately” be moved out of the U.S. Department of Education and will be managed by the Small Business Administration.

“They’ll be serviced much better than it has in the past,” Trump said of the debt. “It’s been a mess.”

Consumer advocates expressed worries that the mass transfer of accounts to the SBA could trigger errors, or compromise borrowers’ privacy. They also raised concerns about how a change in agency might affect protections, and programs such as Public Service Loan Forgiveness.

While details on the president’s decision remain thin, here’s what we know as of now.

Trump said on Friday that the SBA is “all set” to manage the country’s $1.6 trillion outstanding federal student loan debt. More than 40 million Americans hold student loans.

However, experts questioned the president’s authority to move student loans out of the U.S. Department of Education.

Financial aid expert Mark Kantrowitz pointed out that The Higher Education Act of 1965 is “very clear” that the Education Department’s Federal Student Aid office is “responsible for student loans.”

“It will require an act of Congress,” Kantrowitz said, to move the loans to the SBA.

Similarly, the president alone can’t abolish the Education Department. Only Congress can do so. Still, Trump signed an executive order earlier this month aimed at dismantling the agency.

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It’s likely the president’s student loan transfer effort will face legal challenges, along with his other moves to reduce the Education Department, said Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center.

“Borrowers don’t know what to do” for now, Yu said. “There’s a lot of uncertainty.”

In the past, when federal student loan borrowers’ accounts were transferred from one servicing company to another, they experienced credit report errors or had their information lost, Yu said.

“Every transition has gone very poorly for borrowers,” she said. “These are very sensitive records and many of these loans go back decades.”

It is also worrisome that staff at SBA with no prior federal student loan experience would be tasked with managing a complicated lending system with many different programs on which borrowers rely, including income-driven repayment plans, Yu said.

Adding to consumer advocates and borrowers’ concern about Trump’s proposed transfer was his administration’s announcement earlier this month that the SBA’s workforce would be reduced by 43% — leaving fewer people to manage this new responsibility.

One important thing for borrowers keep in mind: The terms and conditions of your federal student loans cannot change even if the agency overseeing them does, experts say. Your rights were guaranteed when you signed the master promissory note at the time your loans were originated.

In anticipation of the transfer to the SBA, borrowers should gather the latest information on their student loan balance now, and keep an updated record of it, Yu said.

At Studentaid.gov, you should be able to access data on your student loan balance and payment progress. If you don’t know which company services your student debt, you can find that information on that site, as well.

Borrowers should also request from their loan servicer a complete payment history of their student loans if their debt has been transferred between companies in the past, Yu said. All this documentation will come in handy if your loan balance or payment history is reported inaccurately in the future.

Those who are pursuing Public Service Loan Forgiveness should certify their work history with the Education Department now, to make sure all eligible periods of employment are confirmed.

PSLF offers debt erasure for certain public servants after 10 years of payments, and borrowers have already long complained of inaccurate payment counts