The Trump administration is moving forward with plans to dismantle the U.S. Department of Education, a move that could have significant consequences for student loan borrowers and federal aid recipients. President Donald Trump is expected to issue an executive order directing the Education Secretary to take steps toward closing the department, though legal experts note that such action would require congressional approval.
Why It Matters
The Department of Education oversees $1.6 trillion in federal student loans and provides funding for low-income students through grants and other financial assistance programs. Eliminating or significantly restructuring the department could affect millions of students, particularly those who rely on federal loans and grants to attend college.
Supporters of the move argue that it will return education policy to the states and reduce federal bureaucracy. Critics warn that it could lead to reduced access to financial aid, making higher education less affordable for many Americans.
The U.S. Department of Education headquarters is seen on March 06, 2025 in Washington, DC. The U.S. Department of Education headquarters is seen on March 06, 2025 in Washington, DC. Chip Somodevilla/Getty Images
What We Know
The Trump administration has long advocated for reducing the federal government’s role in education, citing concerns over inefficiency and ideological influence. The proposed changes include capping or eliminating various federal loan programs and student aid initiatives.
A House Budget Committee memo obtained by Politico outlines specific cuts, including new limits on Direct Student Loans and the gradual elimination of Parent PLUS and Graduate PLUS loans. Additionally, the administration aims to repeal Biden-era student loan forgiveness programs and income-driven repayment plans, replacing them with a more restrictive alternatives.
What Does the Department of Education Do?
The U.S. Department of Education was established in 1980 to coordinate federal education programs, distribute financial aid and enforce civil rights laws in education. It plays a critical role in supporting higher education through grants and loans.
Beyond financial aid, the department oversees policies related to educational equity, school accountability and research. It enforces Title IX, which protects against gender discrimination in education, and other federal regulations.
Which Student Federal Aid Programs Could Be Cut?
Several key programs are at risk under the proposed changes:
- Pell Grants: The House Budget Committee memo obtained by Politico points to a reform of Pell Grants, noting potential reforms include capping awards at the median cost of attendance.
- Public Service Loan Forgiveness (PSLF): Lawmakers are considering reforms that could reduce eligibility.
- Income-Driven Repayment Plans: The administration aims to replace existing plans, such as SAVE and PAYE, with a single repayment option.
- Subsidized Loans: Proposals include removing the interest subsidy for undergraduate borrowers while they are in school.
- Federal Graduate and Parent PLUS Loans: Republican lawmakers are looking to reduce and eventually eliminate these loan options.
Why Is Donald Trump Eliminating the Department of Education?
Trump has frequently criticized the Department of Education, arguing that it represents unnecessary federal overreach. His administration contends that returning control to states will improve education quality and eliminate bureaucratic inefficiencies.
Historically, Republican policymakers have sought to dismantle or downsize the department, with similar proposals surfacing under Ronald Reagan and other GOP administrations. While past efforts have failed, Trump’s executive order signals renewed momentum for the initiative.
Is FAFSA Part of the Department of Education?
Yes, the Free Application for Federal Student Aid (FAFSA) is administered by the Department of Education through Federal Student Aid (FSA). FSA distributes more than $120 billion annually in student aid, including grants, work-study funds and loans.
If the department is eliminated, FAFSA and other financial aid services would likely be transferred to another federal agency or to individual states. However, the exact process remains unclear.
What People Are Saying
Margaret Spellings, former Education Secretary under George W. Bush, previously told Newsweek: “This is an age-old, Republican orthodoxy. There’s plenty of room for improvement at the Department of Education… The question becomes to what end?”
Dr. Martin West, academic dean and Henry Lee Shattuck Professor of Education at the Harvard Graduate School of Education, told the Harvard Edcast: “I think debates over the status of the department and speculation over the department status are largely a distraction from the real debates over the scope and substance of federal education policy. The status of the department is largely a question of bureaucratic organization and is not particularly substantive. The real question is whether the federal government has a useful and valid role to play in K–12 education.”
Per a House Budget Committee memo obtained by Politico: “Under this option, the Department of Education (ED) would offer borrowers two repayment plans for loans originated after June 30, 2024: the currently available 10-year repayment plan and a new income-driven repayment (IDR) plan.
This option would eliminate all other plans, including the Saving on a Valuable Education (SAVE) Plan, which is the IDR plan that was created administrativelyin 2023.”
What’s Next
The executive order is expected to be issued soon, but eliminating the Department of Education would require congressional approval, including a 60-vote threshold in the Senate. If successful, responsibility for federal student aid programs could be transferred to other agencies or shifted to state governments.
For now, students and borrowers should stay informed about potential changes to federal aid programs and loan repayment options as lawmakers debate the future of the department.
