President Donald Trump is gutting the Department of Education, laying off about 1,300 workers. It appears to be part of his larger goal to get rid of the department altogether.
And among the many questions, what does this mean for federal student loans?
From tariffs to DOGE and much more, it’s been a whirlwind out of Washington and that includes questions about the Department of Education and the future of student loans.
According to federal records, the department currently oversees the federal student loans of nearly 43-million people or one in six American adults.
The new head of the Department of Education, Linda McMahon, told Fox News last week she wants to help President Trump fulfill a big campaign promise.
“Ultimately, we want to close the federal Department of Education,” McMahon said.
But doing that is much easier said than done. For starters, while he wants to get rid of it through executive order, the legal consensus is he can’t.
“The president cannot abolish it altogether without the consent and specific authorization from Congress,” Republican Maine Sen. Susan Collins said.
But, according to Collins and others, he can make big changes…
“He can do, legally, some reorganization of the department. Take certain programs away from the department and have other agencies administer them,” Sen. Collins said.
And that, in theory, includes student loans.
President Trump has said he wants the student loan payment and application process to continue but under a different department, like commerce or treasury, the latter of which already performs similar functions like income verification.
Whether that would affect interest rates, eligibility, or any other factor is anyone’s guess at this point.
Even if the Department of Education does go away, those loans will not. You’ll still have to pay them back.
According to the most recent data, almost 190,000 Mainers have federal student loans with an average balance topping $34,000.
