The "Less Bureaucracy, Better Student Aid Act" proposes a significant restructuring of federal student aid administration. Its primary purpose is to transfer all functions related to federal student loans, federal student debt, and student aid eligibility from the Department of Education to the Department of the Treasury. This comprehensive transfer aims to consolidate financial management of student aid programs under a single department. Specifically, the bill mandates the transfer of functions concerning the servicing and collection of defaulted federal student loan debt , encompassing activities like borrower notification, disputes, and repayment agreements. It also moves functions related to the servicing of non-defaulted federal student loan debt , including payment processing and repayment plan administration. Furthermore, all remaining Department of Education functions for major student aid programs, such as Federal Pell Grants , Direct Loans , and Federal Work-study , will shift to the Treasury. The transfer of these functions, along with associated personnel, assets, liabilities, and unexpended funds, will occur on staggered effective dates jointly determined by the Secretaries of Education and Treasury. The Director of the Office of Management and Budget is tasked with ensuring no net increase in federal full-time equivalent employees as a result of these transfers. A key provision also terminates the exemption for delinquent or defaulted federal student loan debt from the Debt Collection Improvement Act , subjecting these debts to its collection requirements.