President Donald Trump has made it a central part of his campaign to dismantle the U.S. Department of Education. Recently, his administration took significant steps towards fulfilling this commitment.
The Education Department plays a crucial role in the K-12 education funding, contributing approximately 10% of the total funding, and is responsible for enforcing federal civil rights protections for students. While it does not create a federal curriculum, it has a substantial impact on higher education financing, managing a vast $1.6 trillion portfolio of student loans and a variety of funding programs for colleges and students.
Education Secretary Linda McMahon stated on Tuesday, “The Trump Administration is taking bold action to break up the federal education bureaucracy and return education to the states,” while announcing new agreements with four federal departments to manage programs and services that were previously under the Education Department’s purview.
Ad
The Department of Labor will take on several initiatives aimed at enhancing academic and literacy development for younger students, particularly focusing on disadvantaged and homeless children. Additionally, the Departments of State, Interior, and Health & Human Services will also oversee new education-related initiatives under these agreements.
The recent announcement has sparked criticism from various nonprofit education organizations. The National Association of Federal Student Aid Administrators (NASFAA) expressed concerns, stating that the plan “raises significant concerns” regarding logistics, efficiency, and the necessary expertise required to manage these programs.
“Transferring these responsibilities to agencies that lack deep experience in higher education programs or policy risks creating new obstacles for students,” commented NASFAA President Melanie Storey in a statement, highlighting the potential pitfalls of such a significant shift in responsibilities.
Currently, the changes do not impact the Education Department’s extensive student loan portfolio or its financial aid programs like Pell Grants. With over 40 million federal student loan borrowers, the Education Department stands as one of the largest holders of consumer debt in the United States.
Under McMahon’s leadership, the Education Department has shifted its focus towards eliminating what she describes as “bureaucratic bloat.” In a memo circulated shortly after her appointment as secretary in March, McMahon indicated that her plans would “profoundly impact staff, budgets, and agency operations.”
Can Trump really shut down the Education Department?
Experts caution that the disbandment of the Education Department could lead to unpredictable consequences not just for K-12 and higher education, but also for the broader economy — if it were to occur.
Michael Itzkowitz, president of the education consulting firm HEA Group, argues that completely eliminating the Education Department is “extremely unlikely.” He emphasizes that Trump cannot dissolve the department unilaterally; it would require Congress to pass legislation — necessitating bipartisan support from Democratic Senators to achieve the 60-vote threshold needed to overcome a filibuster.
Itzkowitz points out that, “we’re now witnessing a de facto dismantling through executive action.” He suggests that the administration has come to the conclusion that, if they cannot eliminate the department outright, they can weaken it internally by redistributing responsibilities, reducing staff, and underfunding programs.
In terms of complete abolishment, history shows it is not without precedent. The current version of the Education Department was established by former President Jimmy Carter and began operations in 1980. However, this was not the original Education Department.
Over a century earlier, President Andrew Johnson created an Education Department during the Reconstruction Era in 1867, only to see it effectively shuttered by 1869 when Congress slashed its funding and merged it with the Department of Interior, resulting in the formation of the Bureau of Education.
The arguments against the department then echo today’s criticisms: Opponents contend that it is wasteful and ineffective, advocating for states to manage their own education systems without federal oversight.
Project 2025, a conservative policy agenda from lobbyists close to Trump, echoes this sentiment almost verbatim.
“Federal education policy should be limited and, ultimately, the federal Department of Education should be eliminated,” asserted Lindsey Burke in the education policy section of Project 2025.
Burke, who serves as the director of education policy at the Heritage Foundation, argues that states and local governments should exert direct control over all federal education funding. Additionally, he suggests that families should have access to education savings accounts that they could contribute to and utilize for a variety of educational options.
Where would $1.6 trillion of federal student debt go?
If legislation aimed at closing the Education Department were to succeed, a critical question arises: What would happen to the existing student loan debt? It is highly unlikely that the loans would be forgiven, despite some optimistic theories circulating on social media. Rather, it is probable that another government agency would take responsibility for managing this enormous portfolio.
In March, Trump proposed transferring student loans to the Small Business Administration (SBA). However, legal challenges have stalled that initiative, leaving unclear whether the administration will continue pursuing this plan.
Another suggestion from Project 2025 involves transferring oversight to the U.S. Department of the Treasury, though this strategy appears to lack momentum as Trump has attempted to distance himself from traditional conservative strategies. Nonetheless, Russ Vought, a key author of Project 2025, is an influential figure in Trump’s cabinet, serving as the director of the Office of Management and Budget. In this capacity, Vought has overseen several rounds of layoffs and buyouts affecting approximately 300,000 federal workers across various agencies, including thousands within the Education Department.
For the time being, the Office of Federal Student Aid, which manages student loans, remains part of the Education Department, although the future of the loan portfolio remains uncertain.
What’s next for Trump’s Education Department
Although Trump does not possess the unilateral authority to disband the Education Department, he exerts considerable influence over its operational direction.
Under Trump’s direction and McMahon’s leadership, the department’s daily operations are undergoing a significant transformation, as noted by Itzkowitz. While former President Joe Biden placed a strong emphasis on student loan forgiveness programs, Trump’s Education Department has largely reversed or stalled such initiatives.
The One Big Beautiful Bill Act, passed this summer under Trump’s administration, aims to overhaul the repayment structure for loans taken out after July 1, 2026. The new legislation will consolidate various repayment options into one comprehensive program known as the Repayment Assistance Plan.
At the same time, significant layoffs within the Education Department have led to considerable delays for borrowers who may already qualify for relief under the existing student loan programs. For instance, the long-established Public Service Loan Forgiveness (PSLF) program, which offers debt cancellation to public-service workers such as teachers and nurses after ten years of payments, is currently facing a substantial backlog of around 70,000 applications.
Additionally, the Trump administration is contending with a lawsuit from a major teachers’ union regarding delays in benefits from a separate loan-relief initiative as well as PSLF.
Itzkowitz believes that the cutbacks initiated by the Trump administration are part of a broader strategy that effectively leads to the neglect and eventual demise of several student loan benefit programs.
“Aside from fulfilling a promise to dismantle the Education Department, it remains unclear how this approach will save taxpayer money, enhance efficiency, or improve services,” Itzkowitz comments. “On the surface, it will likely create disruption and result in the opposite of intended outcomes.”
Ad
Discover More Insights from Money:
Explore the Best Colleges in America
Understanding the Recent Trends in College Costs: A Rise After Years of Stability
New Federal Lending Regulations May Shift Many Master’s Degree Borrowers Towards Private Student Debt
