Latest news with #RachelOglesby
Hindustan Times
16-06-2025
- Business
- Hindustan Times
Trump's plan for federal student loan revealed: New details emerge in court documents
Newly released court documents reveal the Trump administration tried to move control of the country's $1.6 trillion federal student loan program from the Department of Education to the Treasury Department. The plan, which was being quietly developed, would have shifted responsibility for managing and collecting student loans—a job traditionally handled by the Education Department's Federal Student Aid (FSA) office. That effort was paused after a federal judge blocked broader attempts to restructure the Education Department. The federal student loan system affects over 42 million Americans. Moving oversight to another agency could change how payments are collected, how borrowers are protected, and how the system is regulated. With more borrowers falling behind on payments and credit scores dropping, pressure is rising on the government to manage the system better. The court ruling keeps the current setup in place, at least for now, but future legal or political changes could shift the system in major ways. Also Read: Trump mulls expanding US travel ban to 36 more countries | Full list According to court filings, the Department of Education, under Trump, had been working on an agreement with the Treasury to review how federal student loans are managed. Rachel Oglesby, the department's chief of staff, confirmed this in a court filing on Tuesday. Nine Education Department staffers were also scheduled to move to the Treasury to help review loan collections. That plan was stopped after US District Judge Myong Joun issued a ruling last month. The judge also ordered the Education Department to rehire over 1,300 workers laid off earlier this year and blocked efforts to shift loan oversight to the Small Business Administration (SBA). The ruling keeps the federal student loan program under the Education Department's control. It also prevents any transfers of authority to other agencies without Congress getting involved. Some policy experts argue the Treasury has more experience handling public funds than the SBA, but say a move like this would still require a change in law. Under the Higher Education Act of 1965, loan management must stay within the Federal Student Aid office. A past Treasury pilot program from 2014 to 2015 tried collecting defaulted student loans but brought in less money than private collection firms. Other proposals to link student loan payments to wages have also faced problems tied to income tracking and privacy rules. Meanwhile, student loan debt is becoming a growing problem. The pandemic-related pause on loan payments has ended, and many borrowers are struggling to catch up. Between January and March 2025, nearly six million borrowers were 90 days or more behind on payments or in default, according to the Federal Reserve Bank of New York. Many saw large drops in their credit scores, which could make it harder to qualify for mortgages, car loans, or other types of credit.
CNBC
12-06-2025
- Business
- CNBC
Education Department wanted Treasury to help manage student loans
The U.S. Department of Education planned for the Treasury Department to take a hand in managing the country's $1.6 trillion student loan portfolio, recent court documents show. "The Department had been negotiating a memorandum of understanding with the Treasury Department regarding student loan management," Rachel Oglesby, the chief of staff at the Education Dept., said in a court declaration filed late on Tuesday. The agreement involved moving nine Education Dept. employees from the agency's Federal Student Aid Default Collections Unit to Treasury "to discuss collections activities," a spokesperson for the Education Department told CNBC. Education Department plans with the Treasury Department are now on hold after U.S. District Judge Myong Joun in Boston blocked the Trump administration on May 22 from its efforts to dismantle the Education Department. Joun ordered the department to rehire the more than 1,300 employees affected by mass layoffs in March, and blocked the department from transferring student loans to the Small Business Administration. More from Personal Finance:Trump's 'big beautiful' bill could curb low-income tax creditWhat a 'revenge tax' in Trump's spending bill means for investorsWhat's happening with unemployed Americans — in 5 charts Experts say the Treasury talks are more evidence that the Trump administration hopes to reduce the role of the Education Department. President Donald Trump said on March 21 that the Small Business Administration, instead of the Education Department, would handle the country's debt. "They're all set for it," the president said of the SBA, speaking to reporters in the Oval Office. "They're waiting for it." At the time of Trump's announcement that student loans would move to the SBA, experts had said the next most logical agency would have been Treasury, since it already plays a role in collecting past-due debts from Americans through the Treasury Offset Program. Still, 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 either the SBA or Treasury. Consumer advocates express worries that the mass transfer of accounts to another agency could trigger errors, or compromise borrowers' privacy. They also raised concerns about how a change in agency might affect unique student loan protections, and programs such as Public Service Loan Forgiveness. More than 42 million Americans hold federal student loans.
Yahoo
06-02-2025
- Politics
- Yahoo
Education Department staff warned that Trump buyout offers could be canceled at any time
Top officials at the Department of Education told staff Wednesday that if they accept the Trump administration's deferred resignation package, the education secretary may later cancel it and employees would not have any recourse, potentially leaving them without promised pay. The Office of Personnel Management sent notices last week to federal employees that if they resign by Feb. 6, they could continue receiving pay and benefits until the end of September. The Trump administration is hoping to get as many as 10% of the workforce to quit as part of a plan to shrink the federal bureaucracy. But three Education Department officials told NBC News that Rachel Oglesby, the department's new chief of staff, and Jacqueline Clay, chief human capital officer, described significant caveats to the so-called Fork in the Road offer in an all-staff meeting held over Zoom on Wednesday. The officials did not want to be named for fear of retaliation. The Education Secretary would be allowed to rescind the agreement, or the government could stop paying, and employees who took the deferred resignation package would waive all legal claims, the three officials said they were told in the meeting. The three employees say they have only seen sample resignation agreements so far, and would need to agree to resign by Thursday evening before they see the actual terms of their separation. 'It sounded like a commercial for a used car dealership, like, 'Act now, one day only,'' said one department official who attended the meeting. The Education Department did not respond to a request for comment Wednesday. A spokesperson for the Office of Personnel Management said that this was false, and pointed to a memo that states the resignation offer's 'assurances are binding on the government. Were the government to backtrack on its commitments, an employee would be entitled to request a rescission of his or her resignation.' However, the memo includes a sample agreement that includes a clause that agency heads retain the sole discretion to rescind the deal, and employees waive the right to challenge it before the Merit Systems Protection Board, "or any other forum.' A sample deferred resignation agreement specific for Education Department employees includes similar language, according to a copy obtained by NBC News. Across the federal government, pressure has been mounting from the Trump administration to take the buyout offer. In an email to federal employees Tuesday following up on the original buyout proposal, OPM wrote, 'Please note the Deferred Resignation program ('Fork in the Road') expires at 11:59 p.m. ET on Thursday February 6th. There will not be an extension of this program.' More than 40,000 people have taken the buyout offer so far, according to a White House official, out of a federal workforce composed of over two million individuals. There is deep concern among federal workers that the Trump administration's buyout offer could turn out to be a bait-and-switch, with the government potentially failing to hold up its end of the bargain. The comments from Education Department management only worsened those concerns, the three employees said. 'The morale is pretty bad,' a second official said. 'One of the managers I work with just said he hasn't seen any emails in the last four hours since the meeting ended, because everybody just kind of had the life sucked out of them.' A third employee described the tone of the call as angry, as workers put questions in Zoom's chat box but then did not receive responses. The unusual buyout offer has upended Washington, D.C., amid a flurry of executive orders and maneuvers by Trump and tech billionaire Elon Musk, who is head of Trump's Department of Government Efficiency, an office within the White House. In the span of two weeks, Trump and Musk have launched a sweeping effort to remake the federal government, slash spending and even eliminate some agencies. Many Democrats and some Republicans say that Trump and Musk are violating constitutional limits on the presidency in ways that are unlawful and that are precipitating a constitutional crisis. Some labor unions for federal workers have sued to stop the deferred resignation program, arguing that the Trump administration does not have legal authority to offer such buyouts. Federal government labor unions and Democratic attorneys general have warned federal workers that they may never receive the promised resignation benefits, and characterized the offers as an attempt to intimidate them into quitting. Trump has nominated Linda McMahon, the former World Wrestling Entertainment CEO and head of the Small Business Administration in his first administration, to be Education Secretary. No confirmation hearing is scheduled yet. There are other staffing changes coming to the Education Department that may arrive before McMahon does. The department expects to conduct layoffs, known as Reduction in Force, the three department officials said they were told during Wednesday's meeting. Oglesby, the chief of staff, and Clay, the human capital officer, did not share when those will take place or which offices will be hit hardest by them during the meeting. Education Department staff will also need to come into the office daily by Feb. 24. Clay told staff that department leadership is working to find another federal building for remote employees to work from within 50 miles of their home. Trump has said he wants to eliminate the Education Department, which would fulfill a longtime dream of the Republican base, but is supposed to take an act of Congress to achieve. The Wall Street Journal reported Monday that the White House is weighing executive action that could dismantle the department in a piecemeal fashion, citing unnamed people familiar with the matter. This article was originally published on
NBC News
06-02-2025
- Politics
- NBC News
Education Department staff warned that Trump buyout offers could be canceled at any time
Top officials at the Department of Education told staff Wednesday that if they accept the Trump administration's deferred resignation package, the education secretary may later cancel it and employees would not have any recourse, potentially leaving them without promised pay. The Office of Personnel Management sent notices last week to federal employees that if they resign by Feb. 6, they could continue receiving pay and benefits until the end of September. The Trump administration is hoping to get as many as 10% of the workforce to quit as part of a plan to shrink the federal bureaucracy. But three Education Department officials told NBC News that Rachel Oglesby, the department's new chief of staff, and Jacqueline Clay, chief human capital officer, described significant caveats to the so-called Fork in the Road offer in an all-staff meeting held over Zoom on Wednesday. The officials did not want to be named for fear of retaliation. The Education Secretary would be allowed to rescind the agreement, or the government could stop paying, and employees who took the deferred resignation package would waive all legal claims, the three officials said they were told in the meeting. The three employees say they have only seen sample resignation agreements so far, and would need to agree to resign by Thursday evening before they see the actual terms of their separation. 'It sounded like a commercial for a used car dealership, like, 'Act now, one day only,'' said one department official who attended the meeting. The Education Department did not respond to a request for comment Wednesday. A spokesperson for the Office of Personnel Management said that this was false, and pointed to a memo that states the resignation offer's 'assurances are binding on the government. Were the government to backtrack on its commitments, an employee would be entitled to request a rescission of his or her resignation.' However, the memo includes a sample agreement that includes a clause that agency heads retain the sole discretion to rescind the deal, and employees waive the right to challenge it before the Merit Systems Protection Board, "or any other forum.' A sample deferred resignation agreement specific for Education Department employees includes similar language, according to a copy obtained by NBC News. Across the federal government, pressure has been mounting from the Trump administration to take the buyout offer. In an email to federal employees Tuesday following up on the original buyout proposal, OPM wrote, 'Please note the Deferred Resignation program ('Fork in the Road') expires at 11:59 p.m. ET on Thursday February 6th. There will not be an extension of this program.' More than 40,000 people have taken the buyout offer so far, according to a White House official, out of a federal workforce composed of over two million individuals. There is deep concern among federal workers that the Trump administration's buyout offer could turn out to be a bait-and-switch, with the government potentially failing to hold up its end of the bargain. The comments from Education Department management only worsened those concerns, the three employees said. 'The morale is pretty bad,' a second official said. 'One of the managers I work with just said he hasn't seen any emails in the last four hours since the meeting ended, because everybody just kind of had the life sucked out of them.' A third employee described the tone of the call as angry, as workers put questions in Zoom's chat box but then did not receive responses. The unusual buyout offer has upended Washington, D.C., amid a flurry of executive orders and maneuvers by Trump and tech billionaire Elon Musk, who is head of Trump's Department of Government Efficiency, an office within the White House. In the span of two weeks, Trump and Musk have launched a sweeping effort to remake the federal government, slash spending and even eliminate some agencies. Many Democrats and some Republicans say that Trump and Musk are violating constitutional limits on the presidency in ways that are unlawful and that are precipitating a constitutional crisis. Some labor unions for federal workers have sued to stop the deferred resignation program, arguing that the Trump administration does not have legal authority to offer such buyouts. Federal government labor unions and Democratic attorneys general have warned federal workers that they may never receive the promised resignation benefits, and characterized the offers as an attempt to intimidate them into quitting. Trump has nominated Linda McMahon, the former World Wrestling Entertainment CEO and head of the Small Business Administration in his first administration, to be Education Secretary. No confirmation hearing is scheduled yet. There are other staffing changes coming to the Education Department that may arrive before McMahon does. The department expects to conduct layoffs, known as Reduction in Force, the three department officials said they were told during Wednesday's meeting. Oglesby, the chief of staff, and Clay, the human capital officer, did not share when those will take place or which offices will be hit hardest by them during the meeting. Education Department staff will also need to come into the office daily by Feb. 24. Clay told staff that department leadership is working to find another federal building for remote employees to work from within 50 miles of their home. Trump has said he wants to eliminate the Education Department, which would fulfill a longtime dream of the Republican base, but is supposed to take an act of Congress to achieve. The Wall Street Journal reported Monday that the White House is weighing executive action that could dismantle the department in a piecemeal fashion, citing unnamed people familiar with the matter.
