We're three weeks out from the July 1 OBBBA implementation deadline, and the most authoritative voice on what's coming sat down with us on the podcast this week. Under Secretary of Education Nicholas Kent walked Robert through exactly what borrowers, parents, and schools need to know — including some clear answers on questions that have been ambiguous for months. We also have a major new Congressional Research Service report on the Treasury handoff, a quiet but meaningful FAFSA upgrade, and a follow-up on the cybersecurity exposure higher ed still hasn't solved.
Here's a quick look at the most important stories shaping higher education and student finances this week for June 12, 2026.
🎓 Headlines at a Glance
- Under Secretary of Education Nicholas Kent joins The College Investor Podcast to explain the July 1 student loan changes.
- A new CRS report details the Treasury Department's takeover of $179 billion in defaulted federal student loans.
- The FAFSA now shows real-time SAI and Pell Grant eligibility immediately after submission.
- Students remain higher ed's biggest cybersecurity weak link — months after the Canvas hack.
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1. Under Secretary Of Education Nicholas Kent Joins The College Investor Podcast
This week, Robert sat down with Under Secretary of Education Nicholas Kent — the top federal policy official overseeing postsecondary education, career and technical education, adult education, and the $1.7 trillion federal student aid portfolio. With less than three weeks until July 1, this is the most authoritative interview published anywhere on what's actually coming. The full episode is here.
Kent walked us through how the One Big Beautiful Bill Act simplifies the federal student aid system, cutting more than 40 repayment and discharge options down to just two new plans starting July 1.
He broke down exactly what SAVE borrowers need to do now, how the 90-day transition clock works, and why the new Repayment Assistance Plan (RAP) is designed so on-time payments always lower your balance — a clear contrast with how SAVE and IBR can result in negative amortization.
He also discussed the new graduate and Parent PLUS borrowing limits, and made the administration's case that these caps are designed to put downward pressure on the cost of higher education. Kent pointed to early examples of schools already responding — including UC Irvine's Paul Merage School of Business cutting MBA tuition by up to 38% to fit under the new cap.
➡️ Impact: If you're a borrower, parent, or current student trying to navigate the July 1 changes, this is essential listening. Kent's framing of the policy as a deliberate cost-pressure tool is significant — it tells you how the administration intends to measure success, which affects how aggressive enforcement is likely to be on institutions.
For SAVE borrowers in particular, his clarity on the 90-day transition window confirms what we've been telling readers for months: pick your next plan before the clock runs out, or you'll get auto-placed. Listen to the full episode, and share it with anyone in your life who's been confused about what July 1 actually means for them.
2. New CRS Report: Treasury Set To Take Over $179B Defaulted Loan Portfolio
The Congressional Research Service published an updated report on June 9 detailing the Department of Education's transfer of defaulted federal student loan servicing to the Treasury Department's Bureau of the Fiscal Service.
As of December 31, 2025, ED's defaulted portfolio comprises loans of about 7.8 million borrowers (roughly 18% of all federal student loan borrowers) owing $179 billion. The report walks through how Treasury will collect on these loans through administrative wage garnishment, the Treasury Offset Program, and referrals to the U.S. Department of Justice.
The most concerning detail in the CRS report is buried in the analysis: Treasury's Fiscal Service has seen a roughly 40% reduction in employees between September 2024 and February 2026. The report notes that Fiscal Service may need to outsource certain aspects of its cross-servicing functions to handle the additional volume — which could mean more friction, more errors, and longer resolution times for borrowers trying to get out of default.
Borrowers should also note: in June 2025, ED indefinitely paused the offset of Social Security benefits, but that pause could be reversed under the new structure.
➡️ Impact: If you're in default, the window to act on your own terms is closing fast. Treasury's involuntary collection tools are administrative, meaning no court order is required to garnish up to 15% of your disposable pay or seize your tax refund.
Your two best paths out of default remain loan rehabilitation (nine on-time payments based on income, which also removes the default mark from your credit report) or direct consolidation (faster, but the default stays on your credit). The administrative capacity concerns in the CRS report suggest that resolution timelines will get worse before they get better, so move now rather than waiting for a notice.
3. FAFSA Now Shows Real-Time SAI And Pell Grant Eligibility After Submission
In a quietly significant upgrade, Federal Student Aid announced June 1 that students can now see their Student Aid Index (SAI), Pell Grant eligibility, and any comment and reject codes immediately upon submitting the 2026-27 FAFSA — rather than waiting days or weeks for processed results. Students can also make up to four corrections with instantaneous results, with a fifth correction triggering a 24-hour hold before results are returned.
➡️ Impact: If your student hasn't filed the 2026-27 FAFSA yet, the federal deadline is June 30, 2027, but many state and college deadlines have already passed. The real-time results upgrade matters because it lets families compare aid offers and run cost scenarios immediately, which is especially useful for high school juniors getting an early look.
For families with younger students or anyone considering reconsideration through corrections, the four-corrections-without-delay rule effectively turns the FAFSA into an interactive planning tool. File early, and use the instant feedback to make smarter borrowing and school-choice decisions.
4. Students Remain Higher Ed's Biggest Cybersecurity Weak Link
Following the Canvas hack we covered last month (in which the ShinyHunters group stole 275 million users' data from Instructure and forced thousands of universities offline during finals week) Inside Higher Ed reported this week that students remain the primary vulnerability point for college and university cybersecurity.
The pattern is familiar: phishing emails posing as financial aid notices, fake course registration links, malicious "scholarship" attachments, and credential-harvesting fake login pages targeting students' .edu email accounts.
What makes this story particularly relevant right now is the convergence of three trends. First, the Canvas breach data is still out there despite Instructure's ransom payment — meaning phishing attempts using real-sounding course details are likely to spike.
Second, with summer aid disbursements happening across thousands of campuses, students are getting more legitimate financial aid emails than usual, making fake ones harder to spot.
Third, the OBBBA rollout has created a tidal wave of legitimate "your loan terms are changing" communications from servicers and schools — perfect cover for scams.
➡️ Impact: Treat any email referencing your student loans, financial aid, course registration, or Canvas account with extra skepticism right now.
Don't click links in financial aid emails — log directly into StudentAid.gov, your school's portal, or your servicer's site instead. Turn on multi-factor authentication on every account that offers it (your .edu email, StudentAid.gov, your bank, and your school's portal at minimum).
Use a password manager so you're not reusing the same password across accounts. And if anything asks you to "verify" your SSN, date of birth, or banking info via email — it's a scam. Real financial aid offices don't ask for that information by email.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.