FILE-Student Loan Forgiveness Advocates hold a rally outside the Supreme Court on June 30, 2023 in Washington, D.C. (Kent Nishimura / Los Angeles Times via Getty Images)
President Donald Trump is working to eliminate the Department of Education as he’s made significant financial cuts to the agency’s budget since he returned to the White House.
The Education Department sends billions of dollars annually to K-12 schools and manages a $1.6 trillion federal student loan portfolio, but the uncertainty surrounding the agency’s future will affect millions of student loan borrowers.
Forbes reported that the Trump administration has also taken steps to dismantle the Department of Education internally, including placing the agency’s workers on leave.
Will student loan borrowers still have to pay off their loans if the Department of Education is gone?
Why you should care:
Student loan borrowers who owe money on their federal student loans will still have to continue paying back their loans, CNBC reported, citing Abby Shafroth, co-director of advocacy and director of the student borrower assistance program at the National Consumer Law Center.
USA Today reported that over 100 employees at the Office of Federal Student Aid, which manages the federal student loan system, including repayment and student loan forgiveness programs, accepted buyouts in February from President Donald Trump’s deferred resignation program.
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This team is part of the Department of Education which disperses financial assistance to 10 million students annually and supervises the government’s federal student loan portfolio.
The Federal Student Aid workers who took the buyouts include staff members who worked in the Borrower Defense to Repayment department, the unit that reviews applications for student loan forgiveness for borrowers who believe they were misled or defrauded by their school and the Ombudsman team that investigates disputes for student loan forgiveness and repayment programs.
Newsweek reported that if the Department of Education is eliminated and the federal government minimizes its role in student lending, private lenders could fill the void, which experts tell the news outlet could likely make college more expensive.
Student loan borrowers impacted by Department of Education operations
Dig deeper:
Department of Education operations are affecting student loan borrowers. Forbes reported that the agency shut down application processing for income-driven repayment (IDR), which allows student loan borrowers to have affordable monthly payments and a path to potential student loan forgiveness. It’s also a part of the Public Service Loan Forgiveness program, which offers loan forgiveness for public service and nonprofit workers.
This will impact millions of borrowers likely forcing them into expensive repayment plans and forbearance, while stopping the progress toward student loan forgiveness.
Does Trump have the power to eliminate the Department of Education?
Local perspective:
Only Congress has the power to close the Department of Education and although President Donald Trump has pledged to close the Department of Education, he can’t eliminate the agency through executive action.
Trump stance on the Department of Education
The backstory:
Speculation regarding the future of the Department of Education is still up in the air. During the 2024 presidential campaign, Donald Trump pledged to close the Department of Education and grant its authority to states.
And when he returned to the White House after his election win, Trump signed sweeping orders to eliminate America’s schools’ diversity programs and accommodations for transgender students while also pushing for expanded school choice programs, the Associated Press noted.
The White House has also considered an executive order that would direct the education secretary to cut the Department of Education as much as legally possible while asking Congress to shut it down completely.
According to the AP, the Trump administration gave schools and colleges nationwide a Feb. 28 deadline to eliminate diversity programs or risk having their federal money pulled by the administration.
Earlier this week, Linda McMahon was confirmed as the Secretary of Education to lead the Department of Education, admitting that only Congress has the power to close the Department of Education. McMahon has vowed to conserve Title I money for low-income schools, Pell grants for low-income college students, and the Public Service Loan Forgiveness program.
The Source: Information for this story was provided by previous LIVENOW from FOX reporting, Forbes, USA Today, CNBC, and the Associated Press. This story was reported from Washington, D.C.