On Friday, former President Donald Trump announced significant changes to the management of the U.S. Department of Education’s responsibilities. He stated that the management of the federal student loan portfolio, as well as the department’s “special needs” programs, would be transferred to other federal agencies immediately. Trump made this announcement in the Oval Office alongside Defense Secretary Pete Hegseth, stating that the Small Business Administration (SBA), led by Kelly Loeffler, would take over handling the entire student loan portfolio, which currently amounts to approximately $1.6 trillion in loans benefiting around 43 million borrowers.
This portfolio is presently managed by the Education Department’s office of Federal Student Aid (FSA), which has recently experienced significant changes, including buyouts, early retirements, and reductions in staff. Details regarding the transition of responsibilities from FSA to the SBA remain unclear. Trump emphasized that moving the loans out of the Department of Education is an immediate priority, expressing confidence in Loeffler and her team’s readiness to manage it efficiently.
In reaction to the announcement, Kelly Loeffler issued a tweet expressing the SBA’s readiness to lead and restore accountability in managing the student loan portfolio. Meanwhile, sources within the FSA, speaking anonymously, revealed their surprise at the announcement. The Department of Education, the White House, and the SBA have not yet commented on the matter.
The same day, Trump also mentioned a shift in the management of “special needs” programs to the Department of Health and Human Services, overseen by Secretary Bobby Kennedy. This reference likely pertains to the Individuals with Disabilities Education Act (IDEA), which is currently administered by the Education Department and provides crucial funding for special education services.
The Department of Health and Human Services, led by Secretary Robert F. Kennedy, has not issued a comment on the changes. White House Press Secretary Karoline Leavitt recently assured that student loans and Pell Grants would continue to be managed by the Department of Education.
The recent changes follow an executive order signed by Trump directing U.S. Secretary of Education Linda McMahon to facilitate the closure of the Department of Education. This situation is evolving, and further updates will be provided as more information becomes available.
