Rep. Suzanne Bonamici (D-OR) announced she will introduce a resolution to impeach Secretary of Education Linda McMahon, accusing her of illegally gutting the Department of Education by shifting more than 100 programs to other federal agencies without congressional approval.

The resolution alleges McMahon violated her oath of office, made false and misleading statements to Congress, and broke federal law by transferring the operations of multiple offices to agencies outside the Department — actions Bonamici says only Congress has the power to authorize.

What The Resolution Claims

According to Bonamici's office, McMahon has approved at least seven interagency agreements since taking office that moved core Department functions elsewhere.

Among them:

• Treasury to take over the collection of defaulted student loans
• Carl D. Perkins career and technical education programs moved to Labor
• Special education services under the Individuals with Disabilities Education Act shifted to HHS
• Civil rights enforcement was routed to the Department of Justice.

"Secretary McMahon has betrayed students, families, and educators by dismantling and demolishing the Department of Education, something she does not have authority to do," Bonamici said. "Congress created the Department and it would take an Act of Congress to shut it down."

Why It Matters

The resolution puts a formal label — "high crimes and misdemeanors" — on a dismantling effort that has been building for more than a year. McMahon told the House education committee in May that the administration was delivering on a "mandate" to sunset the Department, which has shrunk from roughly 4,200 staff in 2024 to about 2,300 in 2026.

For students and borrowers, the practical question is who actually runs the programs they depend on. Federal student aid, special education protections, and civil rights enforcement are statutory obligations.

Moving the people and money behind them to agencies that have never administered them raises real questions about oversight, continuity, and whether funds Congress appropriated reach schools as intended.

Reality Check

Impeachment of a Cabinet secretary is exceedingly rare: it has happened only twice, to Secretary of War William Belknap in 1876 and Homeland Security Secretary Alejandro Mayorkas in 2024, and neither was convicted. 

As a resolution from a minority-party member, Bonamici's measure faces almost no path forward. House leadership controls whether it ever reaches a floor vote, and conviction would require a two-thirds Senate majority that does not exist.

The move is best understood as a formal protest and a marker for the legal and political fight over the Department's future, not a credible threat to remove McMahon.

The more consequential battles are likely to play out in court, where the central dispute is the same one Bonamici raises: whether the executive branch can relocate congressionally created programs without Congress signing off.

How This Connects

The College Investor has tracked the Department's wind-down closely, from Trump's March executive order directing McMahon to begin shutting it down to the Supreme Court greenlighting mass layoffs and the student loan portfolio's move toward the Treasury Department. In May House testimony, McMahon defended the program transfers and confirmed more than 100 obligations had already been reassigned.

Bonamici's resolution is the latest escalation in that ongoing fight, and the legal question at its core (what the administration can do without Congress) will shape how federal aid and protections function for the millions of Americans who depend on them.

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Student loan servicers have started placing automated phone calls to SAVE borrowers, warning them that their loans will reenter repayment when the forbearance ends and that they'll need to pick a new plan or one will be chosen for them.

Some borrowers have begun shared transcripts of the messages online. One automated message from Nelnet tells borrowers their "loans will reenter repayment when the SAVE plan ends" and that they "will need to choose a new repayment plan. If you don't choose a plan, one will be assigned for you."

The call points borrowers to StudentAid.gov, notes that the new Repayment Assistance Plan (RAP) "becomes available starting July 1st," and reminds those enrolled in auto-debit that payments will pull automatically even if they don't select a plan and default to Standard.

Why It Matters

The Department of Education has been contacting borrowers in the SAVE plan forbearance over the last several months. A second email "courtesy" notice went out in May, and in an interview with The College Investor last week, Under Secretary of Education Nicholas Kent said another round of outreach will happen in June.

This round would be the first direct outreach many SAVE borrowers will have received by phone. Roughly 7 million borrowers still need to leave SAVE, and the calls appear to be designed to ensure as many borrowers are reached as possible.

We reached out to the Department of Education for comment, but haven't heard a response.

The Details

The SAVE plan was struck down in court and the remaining borrowers in the associated SAVE forbearance will need to select a new repayment plan in the coming months. 

Starting July 1, 2026, servicers begin formally notifying borrowers, who then have a 90-day window to choose a new plan. The new options include RAP and a tiered standard plan, alongside existing IBR. Borrowers who don't act risk being moved into the standard repayment plan.

RAP, the new income-driven option, sets payments based on adjusted gross income minus $50 per dependent and includes an interest subsidy and a principal match designed so on-time payments always lower the balance.

Watch Out For Scams

Major changes like the SAVE forbearance ending are exactly when scammers ramp up, preying on confused borrowers with urgent calls, texts, and emails. 

Real servicers will never ask you to pay a fee to switch repayment plans, and no legitimate company needs an upfront payment to do something you can do yourself for free.

If you get a call about your loans, don't share personal information, your FSA ID, or payment details on the spot. These are red flags for student loan scams.

Hang up and reach out directly using a number you trust — call your servicer at the number on your official statements or log in at StudentAid.gov. 

Picking a new plan, enrolling in RAP, and setting up auto-debit are all free and can be done quickly and easily online, and nobody needs to pay a third party to get it done.

How This Connects

This latest round of outreach matches what we heard directly from the top federal official overseeing the program. In our June 10 interview, Under Secretary of Education Nicholas Kent told us that the SAVE plan is "dead," that servicers would notify borrowers in tranches rather than all at once, and that another round of notices would go out to borrowers in June as a reminder ahead of the July 1 changes.

Kent's advice to borrowers was blunt: "Don't wait until July 2nd."

The automated calls now circulating appear to be exactly that June reminder wave. Kent noted more than 300,000 SAVE borrowers had already switched, leaving roughly 7 million who still need to move.

He also reiterated that broad forgiveness "is not going to happen," so borrowers should plan to repay.

The calls are likely a legitimate reminder, but borrowers shouldn't make decisions over the phone. The safest move is to log in directly at StudentAid.gov, compare RAP against the tiered standard and IBR plans using a student loan calculator, and confirm auto-debit settings before billing resumes. 

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What is an asset? It’s a resource with economic value that someone controls with the expectation that it will provide future value.

When most people think about assets, they think about stocks - large cap, small cap, international. Or maybe they think about the mix of stocks and bonds (have you heard of the 60/40 portfolio).

But the problem with this approach is that stocks and bonds are just paper assets - that’s one type (or bucket) of assets. But it’s not the only bucket of assets.

And if you want to really understand your money, you need to look at all the buckets of assets you might have - and you need to create a balanced approach across them all. Let’s dive in and understand what the main buckets of assets are, and how you can use this to think about your money.

4 Main Buckets Of Assets

There are 4 main buckets of assets:

• You
• Paper Assets
• Real Assets 
• Business Assets

You: You are typically your biggest asset, at least for the first 25% to 50% of your life. You earn money, typically by working, which can provide for you and your family. 

Paper Assets: These are stocks, bonds, options, cryptocurrencies, or anything else that you don’t physically own, but represent a value of some type. This is a big bucket for a lot of people - your 401k typically holds your paper assets.

Real Assets: These are physical assets, such as real estate. There are a variety of real estate assets, but these can both provide physical ownership and cash flow.

Business Assets: This is a business that you own. It can be combined with you, but typically this asset bucket focuses on both the value and cash flow that a business provides (outside of a salary). 

Let’s dive into each a little more to understand how they impact your money.

You (Typically Your First Asset)

You are typically your first asset (I say typically because there are a few people that might have inherited money or have a trust fund, but for most of us, that’s not the case).

When I say “You”, I’m referring to your personal ability to earn money. This means going to a job and earning a paycheck. Or side hustling and earning some income. This income stream involves you doing something with your time, and in exchange, you earn money.

You can grow the amount of money you earn by increasing your skills or value. For example, this could mean specializing in a trade or going to college to get a degree. By improving yourself, you have the potential to earn more value for your time.

For example, the minimum wage in California is currently $15 per hour. However, if you build a specialized skill, like being an electrician, you can earn $36 per hour on average. And if you go to college to become an attorney, you can earn $100 per hour on the low end, or upwards of $500 or more if you specialize and gain experience.

The bottom line is your ability to earn money is an asset - treat it as such. And leverage your early ability to earn to diversify.

However, compared to other assets, your income typically does NOT grow as much as other assets. So you need to be mindful of that as you build wealth.

Paper Assets

Paper assets are a big bucket of assets - including stocks, bonds, options, cryptocurrencies, and more. The key distinguishing factor here is that paper assets can be transacted with fairly quickly and easily (whether converting to cash or trading or selling). They get their name because they used to be pieces of paper that define ownership of an asset - such as stock share certificates. Today, most of the ownership here is digital.

Paper assets are usually the first stepping stone most people take beyond themselves. For example, investing in a 401k at work. This is ownership in stocks - a paper asset.

Real Assets

Real assets are a contrast to paper assets in that they are ownership of tangible or physical things - typically real estate. As a result of being something real, transactions are typically harder or slower to process.

Real assets can provide value both intrinsically - by just existing - or by generating cash flow. Or both, in the case of most real estate assets. 

The challenge with real assets, especially real estate, is that the bar to entry can be high.

Business Assets

Finally, you have business assets. This is direct ownership of a business that can generate cash flow or hold value outside of your personal salary or wage. This is ownership beyond a side hustle - to hold a business asset means that you can sell it and another company would pay you for your business without you in it.

Business ownership has been a clear path to wealth creation over the years, but it does typically take a combination of both your time and potentially your money, to make it happen.

How To Think About Your Money Across These Asset Buckets

So, with this understanding of money, what does it mean for your personal finances? Well, in the most simple terms:

During your working years, you should be taking excess money from the “You” bucket (i.e. your earnings), and putting them to work in other buckets - paper assets, real assets, or your business. 

At some point in the future, you want the other buckets to have grown large enough that you can use the income produced by them to replace the income generated by “You”.

But there are also practical considerations you might want to think about on your journey. For example, if the “You” bucket, or maybe the “Business” bucket grows to large, you might want to make sure you’re diversifying into paper assets or real assets to protect yourself.

Of, if you have a heavy cash-flowing business, it might dictate what types of paper assets you hold. For example, you might want to keep a more conservative paper portfolio to offset a highly risky or volatile business.

Final Thoughts

This concept might seem pretty common sense - but it’s important to visualize it and strategize around it. While your “plan” might be to work until retirement by simply using the “You” bucket - your plan could be derailed by something outside of your control.

Also, when you think about diversification, it doesn’t just mean within a bucket (i.e. within paper assets). It also means diversifying across buckets.

Borrowers and advocates watching the American Federation of Teachers v. U.S. Department of Education docket may be wondering where June's student loan status report is. The answer: there isn't one, and there was never supposed to be.

The monthly status reports became one of the few public windows into how fast the Department of Education was processing income-driven repayment (IDR) applications and Public Service Loan Forgiveness (PSLF) buybacks.

With the court-agreed upon requirement now satisfied, that window may close — at least until a federal judge decides whether it should stay open.

Catch-Up

Under the October 23, 2025 order (PDF File), the Department agreed to file exactly six status reports. The first was due 30 days after the federal government's appropriations lapse ended, with each subsequent report due every 30 days after that.

That schedule produced six filings, dated December 15, January 14, February 13, March 16, April 15, and May 13 (with a supplemental follow-up May 19). The sixth report on May 13 was the last one the settlement required.

No June report was missed, because none was owed.

What The Reports Covered

Each report had to disclose, for the prior calendar month:

• IDR applications received, pending, and decided (with approvals and denials where possible)
• The number of borrowers whose loans were discharged under IBR, Original ICR, or PAYE
• PSLF buyback applications received, pending, and decided
• The number of borrowers discharged through PSLF.

The first report also had to explain how the Department identified borrowers eligible for IDR discharge and how many IBR applicants were denied after July 4, 2025, for lacking a "partial financial hardship."

The reports have been a key source of information for borrowers to understand how quickly IDR applications and PSLF buyback applications were processing.

What's Next

The same order says that after the sixth report, the parties "shall confer about the need for further reporting" and, if necessary, tell the court where they stand. That sets up the next hearing on July 8, when the judge can decide whether the Department keeps filing these monthly disclosures or the reporting obligation ends for good.

How This Connects

These filings were the source for some of the starkest data on the student loan backlog.

The Department's own reports showed IDR applications pending in the hundreds of thousands (roughly 530,295 still waiting as of May 2026) and described how it is processing time-based forgiveness in every-other-month increments.

The timing matters for the millions of borrowers caught in the SAVE plan limbo and those weighing a move to IBR, PAYE, or the new Repayment Assistance Plan (RAP) taking effect in July 2026. If the July 8 hearing ends the reporting requirement, borrowers and watchdogs may lose their clearest month-to-month read on whether the backlog is actually shrinking.

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Borrowers who were defrauded by their college may be able to get their federal student loans canceled and previous payments refunded by applying for a borrower defense to repayment discharge.

If approved for the discharge, negative credit reports relating to the loans will also be removed from the borrower’s credit history. Also, eligibility for federal student aid will be reinstated.

More than 700,000 borrowers have submitted borrower defense to repayment claims. And about 40% of processed claims have been approved. Could you qualify to have your student loans discharged as well? Here's how to find out.

What Is Borrower Defense To Repayment?

The borrower defense to repayment is a set of regulations that specify when federal student loans may be discharged because of harmful acts and omissions by the student’s college.

These regulations are authorized by the Higher Education Act of 1965 at 20 U.S.C. 1087e(h), which states:

The specific regulations that apply to your loans depend on whether they were first disbursed:

• Prior to July 1, 2017 (1995 Rule): State-law standard — the school's act or omission had to give rise to a cause of action under the borrower's state law. (Burden essentially the borrower's, no uniform federal test.)
• On or after July 1, 2017 and before July 1, 2020 (2016 Rule): Federal standard — borrower must show, by a preponderance of the evidence, a school misrepresentation, breach of contract, or favorable judgment.
• On or after July 1, 2020 (2019 Rule): Federal standard, but narrower — borrower must prove, by a preponderance of the evidence, that the school made a misrepresentation of material fact they reasonably relied on, which caused them financial harm.

Biden tried to loosen the standards in 2022, but that was blocked by the courts.

Recent Changes To Borrower Defense Regulations

The current regulations (the 2019 Rule), which were adopted during the first Trump Administration, narrowed eligibility for the borrower defense to repayment. Now, to qualify for borrower defense discharge:

• Misrepresentations must have been made with “knowledge of its false, misleading, or deception nature or with a reckless disregard for the truth.” 
• The borrower must have experienced financial harm because of the misrepresentations.
• Borrower defense to repayment claims must be filed within three years of the student’s separation from the college.

The Trump Administration also adopted a partial relief formula that limited the amount of debt discharged under the borrower defense to repayment.

The U.S. Department of Education announced that it was rescinding the partial relief formula and providing full relief to all borrowers with approved borrower defense claims. The U.S. Department of Education also said that it intends to issue new regulations for the borrower defense to repayment. Further developments will be announced on the U.S. Department of Education’s Borrower Defense Updates page.

The IRS has determined that borrower defense to repayment discharges are excluded from income (e.g. tax free). Borrowers are also not required to repay education tax benefits that were claimed on previous federal income tax returns. [Revenue Procedure RP-20-11]

Which Borrowers Are Eligible To File For Borrower Defense To Repayment Discharge?

How does the federal government determine who's been defrauded by a college? Misconduct that could qualify under the borrower defense to repayment rules includes fraudulent or illegal acts by the college under federal or state law and misrepresentations. A few quick examples include: 

• False endorsements
• False certifications (such as the college signing financial aid documents on behalf of the student)
• Providing false information to college ranking organizations

Misrepresentations don't just include false, erroneous and misleading statements, but also omissions that make the statement false, erroneous or misleading. Examples of misconduct include misrepresentations concerning:

• Admissions rates (selectivity), college rankings and student admission profiles 
• The qualifications of teachers and the quality of training equipment
• Graduation rates, employment rates and earnings after graduation
• The ability to transfer credits to other colleges
• Licensing passage rates or licensure requirements
• College and program-specific accreditation, approval and certification
• Tuition and fees, and eligibility for financial aid
• The terms or the amount of a loan
• The nature of a loan (e.g., characterizing a loan as a grant)

If any of these types of misrepresentations influenced you to take out student loans, you may qualify as someone who's been defrauded by your college. If so, you can file a defense to repayment claim even if you're eligible for other types of student loan forgiveness. The college is not required to have closed.

Borrower defense to repayment claims are evaluated under a "preponderance of evidence standard." In other words, to have your claim approved there needs to be more evidence in favor of a conclusion than against it.

Sweet v. Cardona/McMahon

Sweet v. Cardona was the most recent case and settlement around borrower defense to repayment claims - where borrowers filed a class action lawsuit against the U.S. Department of Education, seeking an end to further delays and proper processing of their applications for discharge. (Sweet v. Cardona, Case No. 19-cv-03674-WHA, U.S. District Court, Northern District of California)

The Biden Administration decided to settle this lawsuit. The settlement will provide billions of dollars of discharges to about 200,000 borrowers who attended 153 colleges. 

See the full list of for-profit colleges here.

As of 2026, we're seeing thousands of borrowers receive their discharge under the settlement.

Which Loans Are Eligible For A Borrower Defense To Repayment Discharge?

Only federal education loans in the Direct Loan program are immediately eligible. Loans made under the Federal Family Education Loan Program (FFELP) and Federal Perkins Loan can may be made eligible, however, by including them in a Federal Direct Consolidation Loan.

Private student loans are not eligible and cannot be made eligible. 

How To File A Borrower Defense Claim

Borrowers can file a borrower defense to repayment claim online, by calling 1-855-279-6207 (8 am to 8 pm ET, Monday to Friday), or by completing a 9-page Borrower Defense to Repayment Application Form. The completed application form can be sent by email to BorrowerDefense@ed.gov or by postal mail to:

U.S. Dept. of Education — Borrower Defense to Repayment
P.O. Box 1854
Monticello, KY 42633

Borrowers should attach evidence to support their claim, such as:

Evidence of misconduct can also include legal action taken against the college by the federal government (including the Consumer Financial Protection Bureau) and state attorneys general.

Should Loans Continue To Be Paid While Borrower Defense Claims Are Reviewed?

While a borrower defense to repayment claim is being reviewed, the borrower may choose to have their loans placed in a forbearance. But if the claim if not approved, any interest that accrues will be capitalized at the end of the forbearance period.

With this in mind, you may want to continue paying the interest during the forbearance to prevent the loan balance from increasing. If your borrower defense to repayment claim is approved, amounts previously paid on the loan may be refunded.

Other Financial Relief Options If You've Been Defrauded By Your College

If your college shut down while you were enrolled or within 180 days of withdrawal, you may be eligible for a closed school discharge of your student loans. To qualify, you would need to be able to prove that you weren't able to transfer credits or complete your education at another college.

Did your college apply for financial aid on your behalf or sign your name to a Master Promissory Note (MPN) without authorization? If so, you may be eligible for a false certification discharge of your student loans.

Finally, students may qualify for compensation under state tuition recovery funds and surety/performance bonds. This may provide compensation for out-of-pocket costs that weren’t paid using student loans. Information about these options may be found on the websites of the state board of higher education and the state attorney general.