What happens to student loans if the department of education closes?
President Donald Trump campaigned on the idea of eliminating the US Department of Education. On Tuesday, his administration made the latest move to address that number.
The Department of Education provides an equal 10% of K-12 funding and enforces federal student rights. (It does not cancel the Federal curriculum for schools.) It plays a very large role in financing higher education, including the maintenance of a huge $1.6 Trillion Student Loan Portfolio and many college students and students.
“The Trump administration is taking bold action to dismantle the Federal Education Bureaucracy and bring education back to the states,” said Education Secretary Linda McMahon, announcing agreements with four other departments awarded by the Department of Education.
The Ministry of Human Resources takes part in several programs aimed at supporting the academic and writing development of young students, especially disadvantaged and homeless children. The departments of state, interior and health and human services will also create new programs related to education under the agreements.
The announcement attracted groups of non-profit groups. The National Association of Federal Student Accreditations, or NASFAA, said the program “raises serious concerns” related to planning, efficiency and technology.
“Transferring these responsibilities to organizations without deep experience in higher education systems or policy risks creating new obstacles for students,” said Nasfaa President Melanie Storey in a statement.
Currently, the changes do not affect the department’s loan portfolio for the department of education or financial aid programs such as Pelt grants. With 40 million student loan lenders, the Department of Education is one of the largest holders of consumer loans in the country.
Under McMahon’s leadership, the Department of Education’s work has shifted to “the elimination of bureaucratic bloat,” he said in a memo released shortly after he was sworn in as secretary in March. McMahon said his plans “will affect major personnel, budget and agency operations.”
Did Trump really close the education department?
Experts warn that disbanding the department would have ramifications for not only K-12 and Mkolwane high but the economy as a whole – when It was going to happen.
According to Michael Itzkowitz, president of the consulting firm Hea Group, the complete elimination of the education department is “highly unlikely.” He says Trump can’t get rid of the department himself. Congress must pass legislation to do so — and that would require the support of Democratic Senators to reach the threshold of Democratic majorities to overcome a filibuster.
At the same time, “now we see the de facto announcement of a major action,” reveals ITZKOWITZ, the official of the Department of Education appointed by Obama. “The administration seems to have concluded that if you can’t get rid of the Department, you can take it out from within with job cuts, staff cuts and resource starvation programs.”
As for the complete finish, it has been professionally done before. The current iteration of the Department of Education was created by former President Jimmy Carter, opening in 1980. But that was not the first education department.
More than a century ago, the administration of President Andrew Johnson created a department of education during the reconstruction period in 1867. By 1869, the agency had already been closed. Congress changed its funding and the department merged with the Department of the Interior, becoming the Bureau of Education.
The argument then was very similar to ours today: Opponents of the Department said it was wasteful and ineffective, and that the force should only manage their education programs.
Project 2025, a conservative policy wish list from lobbyists in Trump’s orbit, makes that contradiction almost verbatim.
“Federal education policy should be limited and, ultimately, the Federal Department of Education should be eliminated,” writes Lindsey Burke in the Education Policy Goals section of Project 2025.
Burke, who is Director of Education Policy at the Heritage Foundation, went on to say that states and local governments should have direct control over all Federal education money. And that families should have Education Savings Accounts that they can contribute to and work on their education options.
Will the $1.6 trillion in Federal Student Loans Go?
If the legislation shuts down the education department is successful, the biggest question that needs to be addressed is: What will happen to all the student loan debt? The loan will probably not be forgiven, as some wishful thinking has helped on social media. Instead it is likely that a separate government agency will take over the portfolio.
In March, Trump announced a plan to transfer student loans to business owners (SBA). Legal challenges have put that plan on hold, and it’s unclear whether the administration will continue to pursue it.
Project 2025 offers another option – to transfer them to the US Department of Petroleum, although this strategy does not seem to have Momerem as Trump wants to distance himself from the Conservative Playbook. However, one project of the 2025 author, the Russian appeared, is an important part of Trump’s wardrobe. He serves as the Director of the Department of Public Finance – Office of Management and Budget. As a director, it opened several cycles of mass alloffs and purchases affecting 300,000 employees of programs in many organizations in many organizations, including thousands in the Department of Education.
Currently, the Office of Federal Student Aid, which administers student loans, remains with the Department of Education, although the fate of the loan portfolio is an open question.
What’s next for Trump’s education department
While Trump does not have the unilateral power to dismantle the education department, he wields significant power over its operations.
Under Trump and McMahon, the department’s priorities are taking a 180, Itzkowitz said. While former President Joe Biden focused on student loan forgiveness programs, Trump’s Department of Education has also delayed or halted such efforts.
Trump’s Good Bill legislation, enacted this summer, will waive the fees for mortgage loans taken out after July 1, 2026. Under the current new law, many current payment options are combined into a single payment plan called a payment plan called a payment plan called a payment plan called a payment plan.
Meanwhile, widespread redundancies at the education department have led to a significant holdup of lenders who may otherwise qualify for relief under existing student loan programs. For example, the long-standing public service loan forgiveness program (PSLF), which offers debt cancellation to public service workers such as teachers and nurses after 10 years of payments, faces a staggering backlog of 70,000 applications.
The Trump administration is facing a lawsuit from the union chief over the delay in benefits from the separate loan program and the PSLF.
Itzkowitz suggests that the cutterbacks from the Trump administration are part of a plan that results in the death of several student loan programs.
“Without trying to deliver on the promise of defunding the education department, it’s not clear how this will save tax dollars, increase efficiency or improve services,” Tzkowitz said. “On the face of it, it’s just as likely to cause disruption as to have the opposite effect.”
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