The U.S. Department of Education announced Tuesday it would lay off nearly half its staff as part of its “final mission” as the Trump administration follows through on plans to shut down the agency and cut federal bureaucracy.
The cuts will leave the department with 2,183 employees, down from 4,133 when President Donald Trump took office in January. When asked on Fox News whether the layoffs would lead to “a total shutdown,” newly confirmed Department of Education Secretary Linda McMahon said “yes.”
“His directive to me, clearly, is to shut down the Department of Education,” she told Fox’s Laura Ingraham.
The department supplies a small percentage of funding to public schools, enforces anti-discrimination laws, and administers the Student Aid Program. It also oversees federal student loans held by nearly 43 million people, or one in six American adults, according to the Congressional Research Service.
Now, borrowers are wondering what it will mean for their loans and repayment plans.
If the department does fully shut down, they’re not going away. Trump said they would most likely be overseen by a different federal agency.
“For the most part, students wouldn’t even notice,” said Andrew Gillen, research fellow at the Cato Institute for Economic Freedom. “Where you mail your FAFSA, or repayment checks might change.”
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Gillen said most agree Trump would need legislation to pass through Congress to completely dismantle the agency, but some legal experts say there may be ways to do it without Congressional approval.
In another interview, McMahon told NewsNation that federal aid, including student loans and Pell Grants “might be best served in another department.” She added that Trump understands he needs to work with Congress.
“I think my job is to convince Congress that the steps that we are taking are in the best interest of the kids,” McMahon told NewsNation.
Without the Department of Education, who oversees student loans?
Trump told reporters in the White House on March 6 that student loans would be brought under the jurisdiction of the Department of the Treasury, Department of Commerce, or the Small Business Administration (SBA).
“I don’t think the education [department] should be handling the loans. That’s not their business,” Trump said.
Feb 28, 2023; Washington, DC, USA; Protestors gather outside the U.S. Supreme Court ahead of the oral arguments in two cases that challenge President Joe Biden’s $400 billion student loan forgiveness plan.
He added he thought it would make sense for the SBA to oversee student loans and that the agency’s new administrator Kelly Loeffler, a former Republican senator from Georgia, liked the idea.
“That is by the way the most complicated thing in moving, but it’s very simple if you do that,” Trump said.
Gillen said shifting oversight of federal student aid to the Department of the Treasury would make for a more seamless transition.
“For a lot of the student loan repayment plans, you need income verification,” Gillen said. “Treasury already has that. So just from an administrative perspective, Treasury already has a lot of information that is necessary to implement the student loan programs.”
Gillen added the treasury department also already has the infrastructure to handle millions of borrowers.
“Adding 40 million new borrowers wouldn’t be out of left field for them,” he said.
It’s unlikely that student loans would be parceled out to more than one organization, Gillen added, but oversight of other programs run by the Department of Education could be distributed to different agencies.
“This callous move will directly impact the 90% of students who attend public schools, by denying them the resources they need to thrive,” American Federation of Teachers President Randi Weingarten said in a statement. “We are urging Congress—and the courts—to step in to ensure all students can maintain access to a high-quality public education.”
Advocates from organizations representing students, parents, and teachers including Educators for Excellence, the Council of Parent Attorneys and Advocates, and The National Center for Youth Law have all joined the teacher’s union in releasing statements condemning Trump’s plans to cut the department.
Reach Rachel Barber at rbarber@usatoday.com and follow her on X @rachelbarber_
This article originally appeared on USA TODAY: What happens to Missouri student loans if Education Department closes
