At Hearing, Warren Grills Deputy Treasury Secretary Nominee on Student Loan Default Crisis and Potential Impacts on Seniors’ Social Security Benefits

Nominee unable to estimate number of borrowers with defaulted student loans, despite Treasury taking over defaulted student loan portfolio Seniors with defaulted student loans can see their Social Security payments cut by over $2,000 a year Video of Exchange (YouTube) Washington, D.C. — At a hearing of the Senate Finance Committee, U.S. Senator Elizabeth Warren (D-Mass.) pressed Francis Brooke, nominee to be Deputy Secretary of the Department of the Treasury, to answer basic questions about the largest student loan default crisis in recorded history, which the Treasury Department has now inherited as part of President Trump’s efforts to dismantle the Department of Education. Mr. Brooke was unable to answer questions about the size of the default crisis and potential effects on Social Security benefits for seniors with defaulted loans. In March 2026, the Trump administration announced plans to move the management of defaulted student loans from the Education Department to the Treasury Department. Mr. Brooke, if confirmed, would be the second highest-ranking official at Treasury. Despite the fact that Treasury will oversee the management of defaulted student loans, Mr. Brooke could not answer Senator Warren’s question about the number of people who are in default on their student loans or even offer an estimate, only stating, “I don’t know the specific number, but it’s more than it should be.” “Nine million people who are in default right now and whose financial lives will be in your hands, and you don’t even know who they are,” said Senator Warren. Out of the nine million Americans in default, at least 450,000 are seniors who could face cuts to their Social Security benefits. Under federal law, Treasury can cut the Social Security payments of seniors with defaulted student loans through the Treasury Offset Program. On average, borrowers who were subjected to Social Security offsets saw their benefits cut by over $2,000 a year. Last year, Senator Warren secured a commitment from Secretary of Education Linda McMahon to maintain the pause on Social Security offsets for people with defaulted student loans. Secretary McMahon told Senator Warren that she personally decided to pause the seizure of Social Security benefits after the Trump administration had announced that it would resume forced collections of student debt. Despite Secretary McMahon’s commitment, Brooke refused to commit to following the same policy as that of the Department of Education. “All I need you to do is say we’re going to follow the same policy that the Republican Department of Education was following, and I can’t get an answer,” said Senator Warren. Senator Warren concluded the hearing by announcing she will vote against Mr. Brooke. “I’ll be a no on you,” said Senator Warren. Transcript: Hearings to examine the nominations of Francis Brooke, of Virginia, to be Deputy Secretary, Erin Browne, of New York, to be an Under Secretary, and Sriprakash Kothari, of Massachusetts, and George McMaster, of South Carolina, both to be an Assistant Secretary, all of the Department of the Treasury. Senate Finance Committee July 16, 2026 Senator Elizabeth Warren: Thank you, Mr. Chairman. So, as part of Donald Trump’s crusade to illegally abolish the Department of Education, Trump has moved the management of defaulted student loans from the Education Department over to the Treasury Department. Now, make no mistake: this is not a decision that is made to try to help people who are dealing with student loans. This is just a political stunt. In fact, instead of helping families get out of default, the Trump administration has repeatedly jacked up costs for borrowers. Trump’s latest move? Killing the most affordable student loan repayment plan in history for millions of borrowers. And now families—no surprise—are facing the biggest student loan default crisis in recorded history. Now, Mr. Brooke, you’re asking to be the second highest-ranking official at the Treasury Department, the agency that is now responsible for these defaulted student loans. So let’s start with the basics. Mr. Brooke, how many federal student loan borrowers are currently in default under the Trump administration? Mr. Francis Brooke: Well, thank you for the question, Senator. You know, Treasury acts as a fiscal agent in a lot of these areas. As you know, the Bureau of Fiscal Service— Senator Warren: I’m sorry, I asked a very easy question. I’m not asking for a long oration here. The chair holds me on my time. How many people are you now dealing with, people who are in default on their student loans? You’re going to be in charge. Mr. Brooke: Well, thank you for the question, Senator. I don’t know the specific number, but it’s more than it should be. Senator Warren: You don’t have a specific number. How about a ballpark number? Mr. Brooke: Thank you for the question, Senator. I’d be happy for you to tell me the number. Senator Warren: You don’t have a ballpark number. Do you have a general region of the country’s number? What planet it is on? Mr. Brooke: Thank you for the question, Senator. Senator Warren: That is how important this is to you, that you don’t even know generally? Let me tell you: it’s 9 million people who are in default right now, and whose financial lives will be in your hands, and you don’t even know who they are or where they are. Look, going into default is devastating for people. One potential consequence: Under federal law, Treasury can take away hundreds of dollars per month from Social Security benefits that seniors worked for decades to earn. Over the years, the government has used this power—it’s called offsets—to cut over a billion dollars from Americans’ Social Security benefits. And according to the latest data, seniors with student loans are about twice as likely to be in default than younger borrowers. So, since this is all in Treasury’s jurisdiction and all part of what you want to go head up, let me ask you, Mr. Brooke, if the Treasury Department were to use this power, do you know how many seniors with student loans could face cuts to their Social Security benefits? Mr. Brooke: Thank you for the question, Senator. I do not. Senator Warren: 450,000. Nearly half a million seniors who today are relying on those social security payments to come in, and you’re going to have the power in your hands just to slice that off for them in order to pay on their defaulted student loan debts. These cuts to Social Security benefits would be devastating for seniors. They’re already squeezed by rising costs under the Trump administration. On average, borrowers who are subjected to Social Security offsets see their benefits cut by over $2,000 a year, and for many, that is the difference between living in poverty or not. Now, fortunately, we have had some bipartisan agreement on this issue. Last year, Secretary McMahon told me she would not restart Social Security offsets for student loan borrowers, but since Treasury took over defaulted student loans from the Department of Education, I’ve been asking the administration about whether or not that pause will continue. Mr. Brooke, can you commit to me this morning in this hearing that the Treasury Department will not take away Social Security benefits from seniors with defaulted loans? Mr. Brooke: Thank you for the question, Senator. Treasury is playing a fiscal agent role with respect to this program, if– Senator Warren: Yeah. So you’re going to take this money away from seniors? Is that what you’re telling me? Mr. Brooke: That’s not what I said, Senator. If confirmed, I’d be happy to continue to work with your office on this issue. Senator Warren: Are you going to take the money away from the seniors or not? The Department of Education had said they would not do this. All I need you to do is say we’re going to follow the same policy that the Republican Department of Education was following, and I can’t get an answer. Mr. Brooke: Thank you for the question, Senator. You know, I’d be happy to continue to work with that. Senator Warren: And I’m not getting an answer here. Mr. Brooke: Secretary McMahon has been very clear on the issue. Senator Warren: You know, I just want to say, I’m asking for the minimum here. I’m not into the 9 million people whose lives have been turned upside down. I’m just looking for the half a million people, who are seniors, just a commitment that they can count on getting that Social Security payment month after month after month without Donald Trump taking a big bite out of it, and I can’t even get that out of this nominee. I’ll be a no on you. Senator Warren has led the fight to make our higher education system more affordable, cancel student loan debt, and hold student loan servicers accountable for incompetence and malfeasance. She launched the Save Our Schools campaign in a coordinated effort to fight back against President Trump’s attempts to abolish the Department of Education: On July 6, 2026, in response to a May 2026 request from U.S. Senator Elizabeth Warren (D-Mass.), the Government Accountability Office (GAO), an independent government watchdog, confirmed it would investigate whether the Trump administration’s dismantling of the Department of Education (ED) is harming ED’s ability to root out waste, fraud, and abuse of Title IV financial aid funds. On June 8, 2026, Senators Warren (D-Mass.) and Merkley (D-Ore.), along with Representatives Pressley (D-Mass.) and Carson (D-Ind.), led 62 members of Congress in pressing the Department of Education to immediately address the largest student loan default and delinquency crisis on record, which has been made worse by the Trump administration’s policies. On May 28, 2026, in response to a request from Senator Warren (D-Mass.), the Government Accountability Office (GAO), an independent government watchdog, confirmed the expansion of its investigation into the Department of Education’s (ED) transfer of critical programs to other agencies through interagency agreements (IAAs), including the transfer of student loan default collections to the Department of the Treasury. GAO previously confirmed it had initiated an investigation into ED’s transfer of grant programs for career and technical education and adult education to the Department of Labor. On May 21, 2026, Senator Elizabeth Warren (D-Mass.) asked the Government Accountability Office (GAO) to open a new investigation into whether the Trump administration’s dismantling of the Department of Education (ED) is harming ED’s ability to root out waste, fraud, and abuse of Title IV financial aid funds. On May 4, 2026, U.S. Senator Elizabeth Warren (D-Mass.) released new responses from the Department of Education and the Treasury Department demonstrating that the agencies cannot articulate a clear purpose or plan for implementing their illegal interagency agreement (IAA) transferring the administration of federal student loans to Treasury. On April 28, 2026, Senators Warren (D-Mass.) and Bernie Sanders (I-Vt.) pressed the Consumer Financial Protection Bureau’s new Student Loan Ombudsman , Geoffrey Gradler, on his plan to protect student loan borrowers, especially given his past censorship of a key student loan report at the CFPB and his background as a lobbyist for lenders. The senators also asked him to recuse himself from past clients’ matters that might come before his office at the CFPB. On April 2, 2026, Senators Warren, Sanders, Wyden, Murray, and Baldwin—all top Democrats on influential education committees—pressed Secretary of Education Linda McMahon and Secretary of the Treasury Scott Bessent to rescind their plans to move the administration of federal student loans to the Treasury Department, the latest move in the Trump administration’s attempts to dismantle the Department of Education. On February 23, 2026, Senators Elizabeth Warren and Bernie Sanders, along with Representative Ayanna Pressley, released a response from the Department of Education to their November letter regarding a potential sale of the federal student debt portfolio. In the response, ED confirms for the first time publicly that they are weighing a sale of the federal student loan portfolio. On February 19, 2026, Senators Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.) pushed Education Secretary Linda McMahon on concerns that the U.S. Department of Education is apparently obstructing Congressional efforts to hold federal student loan servicers accountable for underperformance. On February 2, 2026, Senator Warren released a new report revealing the findings of their investigation into how private student loan lenders will reap the benefits from cuts to federal student loan access enacted in Republicans’ Big, Beautiful Bill (OBBBA). The report is the first Congressional analysis of the impacts of the OBBBA’s student loan restrictions on the private lending market. On January 22, 2026, Senators Elizabeth Warren, Jeff Merkley (D-Ore.), Sheldon Whitehouse (D-R.I.), and Tim Kaine (D-Va.) led their Senate colleagues in demanding answers from Trump Education Secretary Linda McMahon about the Trump Administration’s proposal to eliminate affordable student loan repayment options for millions of Americans. On December 8, 2025, Senator Warren led her colleagues in writing to the federal student loan servicers to ensure they are providing borrowers with the customer service they deserve in the wake of the Trump administration’s student loan policy whiplash. The senators sent letters to MOHELA, Nelnet, EdFinancial, Maximus, and CRI. On December 1, 2025, Senator Warren published an op-ed in USA Today calling for Secretary of Education Linda McMahon to resign following the recent news that President Trump and Secretary McMahon plan to further dismantle the Department of Education (ED). On November 17, 2025, Senator Warren led over 40 of her colleagues in a letter urging Secretary of Education Linda McMahon and Secretary of the Treasury Scott Bessent to immediately end any plans to sell or transfer the federal student loan portfolio to the private market. On November 10, 2025, Senator Warren led her colleagues in a letter urging the Trump administration to use the IRS’s existing legal authorities to stop the looming “tax bomb” facing borrowers who obtain income-driven repayment (IDR) discharges of their student loan debt. On October 15, 2025, Senator Warren and Representative Ayanna Pressley (D-Mass.) led 70 members of Congress in a letter calling on the Trump administration to address the ongoing and unprecedented wave of student loan delinquencies and defaults, which threatens the financial stability of millions of people and could have disastrous effects on the American economy. On September 19, 2025, following a push by Senator Warren and nine other senators, the Acting Inspector General of the U.S. Department of Education agreed to open an investigation into DOGE’s infiltration of internal systems, including the scope of its access to sensitive student loan borrower information and its impact on borrowers’ rights and privacy. On August 26, 2025, Senator Warren led colleagues in sending a follow-up letter to Education Secretary Linda McMahon condemning the Department of Education for deliberately hiding the “Submit a Complaint” button on the Office of Federal Student Aid’s website, firing employees responsible for providing customer service to borrowers and families and misleading Congress about the scope of these firings. On August 4, 2025, Senator Warren led eight Senators in pressing major private student loan lenders on their plans to serve the incoming surge of borrowers who will be pushed to the industry because of Republicans’ recently passed “Big, Beautiful Bill.” On July 17, 2025, Senator Warren released a new 23-page report , “Education At Risk: Frontline Impacts of Trump’s War on Students,” highlighting warnings from 11 major national education and civil rights organizations on the impact of the Trump Administration’s dismantling of the Department of Education (ED), slashing support to millions of American students, primary and secondary school teachers, administrators, parents, and student loan borrowers. On July 15, 2025, Senators Warren and Sanders, along with Senate Democratic Leader Chuck Schumer, sent a letter to Secretary of Education Linda McMahon, urging her to reverse the interest hike on student loan borrowers in the SAVE forbearance. ###