Sen. Elizabeth Warren, D-Mass., is attempting to stop the reported selloff of the $1.6 trillion student loan portfolio to private companies — demanding Education Secretary Linda McMahon and Treasury Secretary Scott Bessent quit their reported talks of a potential sale.

“We urge you to immediately cease any efforts to privatize the federal student loan portfolio,” Warren wrote in a bicameral letter to the secretaries. “Let’s be clear: This sale would be a giveaway to wealthy insiders at the expense of working-class borrowers and taxpayers,” the letter reads, adding “It threatens the loss of borrowers’ legally guaranteed protections, and the sale would likely be illegal if the debt is sold at a loss for taxpayers.”

The letter — signed by more than 40 Democratic lawmakers — was led by Warren, independent Vermont Sen. Bernie Sanders and Massachusetts Democratic Rep. Ayanna Pressley. It argues that a sale would strip borrowers of protections from predatory lenders and create financial losses for taxpayers, which would in turn benefit private companies while harming individual borrowers and their families. By tampering with the student loans of more than 40 million Americans, Warren claims the Trump administration is threatening an “extra punch in the gut” to families.

“Any way you spin it, this sale would be a massive giveaway to giant companies at the expense of taxpayers and student loan borrowers,” Warren wrote in a statement first obtained by ABC News, adding “It’d be a tremendous mistake.”

Discussions about a potential sale to the private market was first reported by Politico last month. McMahon has not suggested that private companies would obtain parts of the student loan portfolio, which is housed in the agency’s Office of Federal Student Aid (FSA), but she did confirm that she is eyeing the Treasury Department as a potential landing spot.

At a fireside chat at the Cato Institute last summer, McMahon said the Treasury Department may be better equipped to handle the money.

“I really do think that a natural area for student loans to reside is in the Department of Treasury,” McMahon said, adding “Secretary Bessent and I have had conversations about that.”

ABC News has not independently confirmed the reported conversations between senior officials at the Department of Education and Treasury about privatizing student loans, and retaining a private consulting firm to appraise the value of the debt portfolio to ready the loans for a sale, as reported by Politico.

In response to an inquiry from ABC News, Ellen Keast, Department of Education press secretary for higher education, said, “We are evaluating ways to improve the fiscal health of the nearly $1.7 trillion student loan portfolio to safeguard the interests of both students and taxpayers.”

Still, Warren’s Massachusetts colleague Ayanna Pressley said it is “dangerous and unacceptable” for the administration to work with so-called predatory companies. “We’re calling on the Trump Administration to immediately back off, stand with borrowers, and put people over profits,” Pressley wrote in a statement to ABC News.

Warren launched her Save Our Schools campaign in April to investigate the administration’s attempts to shutter the Department of Education, including downsizing FSA and making changes to the student loan system. More recently, the Department’s office watchdog launched an investigation into the agency’s sensitive student loan data after Warren and a group of Democrats requested a probe into the Department of Government Efficiency’s alleged “infiltration” of FSA.

Even though no agreement has been signed yet, the Department is exploring “additional partnerships” with federal agencies to help McMahon move statutory functions, like special education services, to other agencies and put herself out of a job. The education department under McMahon has already taken steps to transfer a few of its non-statutory functions, including starting a workforce development partnership with the Department of Labor and moving a program dedicated to educating the next generation of farmers to the Department of Agriculture.

Former Department of Education employees decried a potential student loan selloff and emphasized that it’s an unserious and unsuccessful move that the first Trump administration attempted in 2019. James Kvaal, who worked in senior roles in the Obama and Biden administrations, told ABC News his higher education portfolio under former President Barack Obama included moving some student loan functions to the Department of Treasury before the pilot was abandoned.

“Treasury had its own authority to collect on debts and they wanted to see if they could do a better job with student loans than the Department of Education was doing,” Kvaal said.

“The answer was, no, they ended up having higher costs and collecting fewer dollars for Treasury,” he added.

Melissa Byrne, the founder of We The 45 Million, which advocates for the cancellation of student debt for all Americans, said a potential selloff creates a “nightmare” scenario for borrowers.

The move to private companies doesn’t create a smoother, more efficient, payment process for borrowers nor does it ensure their protections, according to Byrne.

“What they’re going to do is make it worse by not only making the servicing bad, but then taking away all of the incentives,” Byrne told ABC News. “If you’re selling the loan to the private sector, the private sector isn’t going to see the borrower as a consumer that they need to be responsive to,” she said.

“Who’s even going to be accountable [for the loans]?” she added. “It’ll be the borrower and their families that get lost in all of this.”