How Trump’s decision to slash the Department of Education’s workforce by half could impact your student loan

“The Department of Education. Who needs it?” seems to be the message coming out of Donald Trump’s White House.

A few weeks ago, soon after President Donald Trump took office, multiple outlets reported that the Trump administration was preparing an executive order to eliminate the Department of Education responsible for managing access to student loans that help fund the college degrees of millions of Americans.

While that order has yet to come, CNN is reporting that employees of the Department of Education have been asked to vacate the offices by 6 pm ET and that leaders plan to cut the workforce of the agency by half. Up to 4,000 workers could lose their jobs as a result of these cuts.

Here we will look at the fate of the loans and the prospects of securing them given the administration’s latest move to remake the federal government.

The confusion for borrowers that could follow if the Department of Education is eliminated

Regardless, given the sheer number of people who take out student loans each year and those who continue to hold their education debts, dismantling the Department of Education would cause confusion for borrowers. According to the Education Data Initiative, as of 2024, 42.7 million borrowers owe around $1.69 trillion in federal student loan debt.

If these cuts to the workforce are the first step in dismantling the Department of Education, what will happen to student debt? For those who believe the change could lead to the elimination of outstanding debts... don’t get your hopes up. Additionally, for those seeking out trusted information about their student loans, including repayment plans, the migration of the information to another website could limit access to the resources currently available on the department’s website.

Instead, the Office of Federal Student Aid (FSA), which administers federal student loans, would be moved to another department and continue to carry out its functions. The situation highlights how the headline about the department being dismantled is a bit misleading, considering that many of the services it provides would simply be placed under the jurisdiction of other government agencies. Newsweek reported that one possible destination for the FSA could be the Department of the Treasury, based on information received from Betsy Mayotte, who currently serves as the president and founder of The Institute of Student Loan Advisors.

The fate of FAFSA applicants

The reports indicating that this decision is under consideration are likely stressful for the millions of young Americans who will submit a FAFSA (Free Application for Federal Student Aid) later this year. The deadline to apply is June 30, 2025, giving the federal government just a few months to determine where applicants should send their information should the Department of Education see its functions upended as staff are cut.

Get your game on! Whether you’re into NFL touchdowns, NBA buzzer-beaters, world-class soccer goals, or MLB home runs, our app has it all. Dive into live coverage, expert insights, breaking news, exclusive videos, and more – plus, stay updated on the latest in current affairs and entertainment. Download now for all-access coverage, right at your fingertips – anytime, anywhere.