The future of the Department of Education is at stake as President Donald Trump and congressional Republicans threaten to eliminate it, or at least dramatically curtail its operations. Millions of American families planning for college, and even greater numbers of student loan borrowers, could be impacted by the resulting disruptions.
Here’s where things currently stand with the Department of Education, and what student loan borrowers and prospective college students should know.
Executive Order Will Likely Call For The Elimination Of The Department Of Education
President Trump is expected to issue an executive order calling on the Department of Education to be eliminated.
“Oh I’d like it to be closed immediately,” said Trump at a press conference last week. “Look, the Department of Education is a big con job.”
The Department of Education was created in 1979. Its operations include funding for students with disabilities, enforcement of civil rights in educational institutions, and overseeing the country’s vast student loan and federal financial aid system, including the Direct student loan program and Pell Grants.
Most legal experts agree that only Congress can authorize the elimination of the department, so any executive order by itself would probably not be sufficient. However, it’s possible that the department could diminish its own operations, or try to siphon off responsibility of certain programs to other federal departments.
Importantly, if all or part of the Department of Education is abolished, that would not eliminate the federal student loan system or abolish a student loan borrower’s repayment obligations. The Office of Federal Student Aid, which oversees the federal student loan and aid system, would likely be migrated to a different federal department. Still, student loan borrower advocacy groups have warned that this could be highly disruptive for federal student loan and aid programs.
The executive order will likely be issued within the next couple of weeks, according to recent reporting.
Staff Cuts At the Education Department Continue, Potentially Impacting Student Loan Programs
Meanwhile, the Trump administration is barreling ahead with plans to shrink the federal workforce, including at the Department of Education. Earlier this month, several dozen department staff were put on leave, reportedly for attending diversity trainings under Secretary Betsy DeVos during the first Trump administration. This week, the administration began initiating mass layoffs at the department, including those who work at the Office of Federal Student Aid and help manage the federal student loan system. The administration has not released specific numbers of employees who have lost their jobs.
Advocacy groups for student loan borrowers have warned that reducing staff at the Department of Education could lead to problems and disruptions for students and borrowers such as delayed FAFSA processing, slower approvals for student loan forgiveness and discharge, diminished oversight over federal student loan servicers, and more administrative errors.
DOGE Access To Department Of Education Student Loan Borrower Data Temporarily Halted
Last week, a federal court temporarily halted access to the Department of Education’s sensitive student loan borrower data by the Department of Government Efficiency, or DOGE, run by Elon Musk. Recent reporting indicated that a group of DOGE employees had gained broad access to highly sensitive information of millions of Americans associated with the federal student loan and aid system. The data could contain Social Security numbers, dates of birth, and information on income and assets. A University of California student association filed suit to halt the access.
“Last Friday, Public Citizen — representing the University of California Student Association, with co-counsel at Student Defense — sued to block ‘DOGE’ from perpetrating this massive, dangerous, and unprecedented invasion of privacy,” said Public Citizen, one of the legal organizations representing the student association, in a blast email last week. “The judge issued an order restricting ‘DOGE’ access at the Department of Education at least until February 17 while our lawsuit goes forward.” The court is expected to then consider whether to extend the temporary order.
Borrowers should be aware that despite online rumors, there is no basis to request or receive student loan forgiveness as a result of DOGE’s access to federal student loan borrower data. FERPA, a federal law that protects sensitive personal information for students and student loan borrowers, has no private right of action, meaning there is no legal right for an individual to file a lawsuit over a FERPA violation. And student loan forgiveness is not a remedy for a FERPA violation.
Nominee For Key Department Of Education Role Says She’ll Protect Key Student Loan Forgiveness Program, But Advocates Are Wary
Last week, the Senate held a confirmation hearing for Linda McMahon, President Trump’s nominee to lead the Department of Education. During the lengthy hearing, McMahon pledged to uphold and implement the Public Service Loan Forgiveness program, a popular program that allows borrowers to receive federal student loan forgiveness after 10 years of repayment while working in nonprofit or government employment.
“Clearly there are programs that have already been passed by Congress that do, in fact, grant loan forgiveness for public service,” said McMahon during the hearing, responding to a question from Senator Tim Kaine (D-VA). “We should honor those programs.”
However, McMahon also vowed to implement President Trump’s plans to diminish or abolish the Department of Education. And advocates were wary of her response to questioning about what she would do if she was instructed to violate federal law.
“Linda McMahon’s testimony was nothing more than two hours worth of gaslighting,” said Aissa Canchola Bañez, Policy Director of the Student Borrower Protection Center, in a statement last Thursday. “McMahon had the opportunity to state clearly and unequivocally that she will protect students, borrowers, and working families across the nation from the chaos that has already ensued as a result of President Trump and Elon Musk’s work to make their Project 2025 agenda the law of the land. She did not. When asked whether she would abide by a directive by President Trump that breaks a law, her nonanswer spoke volumes.”
A full Senate vote on McMahon’s nomination for Secretary of Education is expected to happen as soon as this week.
Department Of Education Student Loan Forgiveness And Aid Programs Targeted For Cuts
Meanwhile, House and Senate Republicans are evaluating a number of cuts to federal student loan forgiveness, repayment, and aid programs to offset the anticipated costs of extending massive tax cuts. The proposals include limiting or fully repealing federal student loan forgiveness programs including the SAVE plan and time-based student loan forgiveness under IDR plans for new borrowers. Lawmakers are also considering a repeal of new borrower-friendly rules for the Closed School Discharge and Borrower Defense to Repayment programs, the elimination of in-school interest subsidies and the student loan interest tax deductions, and the wind-down of the Direct PLUS student loan programs for both parents and graduate students.
Last week, House Republicans unveiled a budget blueprint calling on $330 billion in deficit reduction to offset the costs of extending the tax cuts. This is a critical first step as lawmakers move forward with plans to incorporate the tax cuts and spending reductions in a budget reconciliation bill, which would allow GOP leaders to pass legislation with party-line majorities in Congress and bypass the Senate filibuster. More details about specific changes to the Department of Education and federal student loan forgiveness and repayment programs should be revealed in the coming weeks.
Read the full article here