- Trump said student loans are moving out of the Department of Education and into the Small Business Administration.
- He also said that HHS will be taking over “special needs” and nutrition programs.
- This comes one day after Trump signed an executive order to begin eliminating the Department of Education.
Student loans are moving to the Small Business Administration, President Donald Trump said.
One day after signing an executive order to begin the process of eliminating the Department of Education, Trump said in an Oval Office appearance on Friday the SBA will take over the management of $1.7 trillion in federal student loans.
“We have a portfolio that’s very large, lots of loans, tens of thousands of loans, pretty complicated deal, and that’s coming out of the Department of Education immediately, and it’s going to be headed up by Kelly Loeffler, SBA, and they’re all set for it,” Trump said. “They’re waiting for it. It would be serviced much better than it has in the past. It’s been a mess.”
The SBA announced on Friday that it’s reducing its workforce by 43%, saying that “core services to the public” like disaster assistance programs will not be impacted.
Trump also said that Robert F. Kennedy, Jr., the head of the Health and Human Services Department, will be handling special needs and nutrition programs.
The Department of Education and SBA did not immediately respond to a request for comment from Business Insider. Kennedy wrote in a post on X that HHS is “fully prepared to take on the responsibility of supporting individuals with special needs and overseeing nutrition programs that were ran by @usedgov.”
It’s unclear how the SBA will manage the federal student-loan portfolio. Trump’s executive order said that Education Secretary Linda McMahon should take steps to close the department while “ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely.”
Still, with over 40 million Americans holding student loans, it would be a significant undertaking, especially with those borrowers being on different repayment plans and relief schedules. Jared Bass, senior vice president for education at the left-leaning think-tank Center for American Progress, told BI that other agencies aren’t equipped to manage the Department of Education’s tasks.
The department “has people that are well versed in the oversight,” Bass said, and “having a Secretary of Education focused on one particular thing within the Cabinet agency is helpful, not hurtful.”
Education Secretary Linda McMahon wrote in an opinion piece on Fox News on Friday that eliminating the Department of Education “will not happen tomorrow.”
“But we can move in that direction immediately by revising guidance documents and grant competitions to advance the president’s vision of returning education authority to state and local education leaders,” she wrote.
The department had already cut 50% of its staff as part of its agency reorganization efforts. McMahon and Trump have maintained that programs like student loans and grants for low-income students will not be impacted, but advocates and some education experts have said that’s likely not the case.
“You can’t have programs without people, and if you are issuing risks and reducing staff by nearly 50%, that’s going to impact service, that’s going to impact delivery,” Bass said.
Some advocates criticized Trump’s plan to transfer the student-loan portfolio to SBA. Jessica Thompson, senior vice president of the Institute of College Access and Success, said in a statement that this action cannot happen without congressional approval.
“Should policymakers mistakenly proceed with a transfer of the loan portfolio to another agency, we urge them to craft a thoughtful, methodical plan to transfer these major and complex functions to prevent a total breakdown of the system—and real financial harm for millions,” Thompson said.
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