Your student loan no longer depends on the Education Department: Here’s what it might mean for your payments
Here’s how Trump’s Department of Education cuts will affect your repayment plan.
President Trump continues in his efforts to destroy the U.S. Department of Education. On Friday, he announced that running of the federal student loan portfolio would be transferred to other federal agencies effective immediately.
Speaking from the Oval Office alongside Defense Secretary Pete Hegseth, Trump stated, “I’ve decided that the SBA, the Small Business Administration, led by Kelly Loeffler—a terrific person—will take over management of the student loan portfolio. It’s a very large portfolio,” he added.
The federal student loan portfolio includes about $1.6 trillion in loans for around 43 million borrowers and is currently run by the Education Department’s office of Federal Student Aid (FSA). However, with the huge cuts being made across the Federal Government and Education Department of the United States, the work is no longer sustainable and will therefore be moved. It is not known if the employees at the FSA will be transferred to the SBA or if they will simply, as we have seen multiple times so far with Trump and Musk’s chaotic slash-and-burn tactics, simply lose their jobs.
Trump cannot dismantle the Department of Education without the approval of Congress.
— Public Citizen (@Public_Citizen) March 20, 2025
He’s breaking the law. Again.
Maybe if he focused more on educating himself instead of attacking education, he’d know that. 🫶 pic.twitter.com/lH6aH6QZz5
Trump violates law with new Education Department cuts
Trump said that Loeffler is “all set” to take on the role and that her staff are “waiting for it. It’ll be serviced much better than it has in the past. It’s been a mess.”
Loeffler herself said in a statement that “as the government’s largest guarantor of business loans, the SBA stands ready to deploy its resources and expertise on behalf of America’s taxpayers and students.”
As for how things will actually work going forward, nobody in power appears to be making any clear statements on the matter.
Apart from that, Trump appeared to violate law saying that “Bobby Kennedy, the Health and Human Services [secretary], will be handling special needs,” presumably referring to cabinet member Robert F. Kennedy and the federal law known as the Individuals with Disabilities Education Act (IDEA), guarantees students with disabilities the right to a free education. However, law dictates that it is the secretary of education’s responsibility to administer these funds. Again, law doesn’t seem to be a problem for Trump.
Even Fox News knows Donald Trump can’t actually eliminate the Department of Education.
— Gavin Newsom (@GavinNewsom) March 20, 2025
You’re up Congress. Time to step it up. pic.twitter.com/tA9h52xrMy
More confusion is being created by Trump’s seemingly random appointments, cuts and changes that are causing havoc for the American citizens they affect, all while creating jobs for those officials he has chosen to put in positions of huge power in government.
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