Trump Shuts Down Education Department, Transfers Student Loans to SBA
Washington, D.C. – In a landmark move, U.S. President Donald Trump announced that the Small Business Administration (SBA) will take over the management of federal student loans, affecting approximately 40 million borrowers. The decision follows Trump’s executive order dismantling much of the Department of Education, fulfilling a key campaign promise.
The move has sparked concerns about the future of services previously managed by the education department, particularly student loan administration. However, Trump assured the public that the transition would be seamless.
“[The SBA is] all set for it, they’re waiting for it, and it will be serviced much better than it has in the past. It’s been a mess,” Trump stated from the Oval Office on Friday. He added that the transition would happen “immediately,” though he did not provide a specific timeline.
HHS to Take Over Additional Student Services
In addition to the SBA’s takeover of student loan management, Trump confirmed that the Department of Health and Human Services (HHS) will assume responsibility for several student-related programs, including special needs education and nutrition assistance.
“[Robert F. Kennedy Jr.] will be handling special needs and all of the nutrition programs and everything else. Rather complex,” Trump said, highlighting the scope of the reorganization.
Education Policy Shift and Budget Cuts
The restructuring is part of the Trump administration’s broader effort to reduce government spending. Earlier in the week, Trump criticized the education department for “breathtaking failures” and emphasized his plan to return control of education funding to individual states.
While states already oversee most aspects of K-12 education, the federal government has historically managed student loan programs that help U.S. students afford higher education. The dismantling of the Department of Education raises questions about the future of these programs and how effectively the SBA can handle student debt management.
SBA Workforce Cuts and Cost Savings
As part of the transition, the SBA announced Friday that it would be cutting over 40% of its workforce. Officials estimate the cuts will save the agency more than $435 million annually by the next fiscal year.
The changes mark a significant shift in the federal government’s role in education, reflecting Trump’s commitment to streamlining operations and reducing bureaucracy. However, critics argue that dismantling the Department of Education and shifting student loan management to the SBA could create confusion and inefficiencies.
With millions of student borrowers and education professionals awaiting further details, the full impact of this reorganization remains to be seen.