Trump Moves to Strip Education Department Powers, Shifts Student Loans to SBA, Special Needs to HHS

Trump has announced a dramatic next step in his effort to dismantle the Department of Education, revealing that two of its core responsibilities—student loans and special needs/nutrition programs—will be transferred to other federal agencies.

In remarks from the White House, Trump declared that the Small Business Administration (SBA), led by Kelly Loeffler, will now oversee the entire federal student loan portfolio, which includes $1.6 trillion in loans owed by 43 million Americans. Trump insisted the portfolio, currently managed by the Department of Education’s Federal Student Aid Office, would be “serviced much better” under the SBA.

“We have a portfolio that’s very large, lots of loans—tens of thousands of loans—pretty complicated deal,” Trump said Friday. “And that’s coming out of the Department of Education immediately.”

However, critics quickly noted a glaring issue: the SBA has no infrastructure to handle federal student aid. The Federal Student Aid Office employs over 1,000 people, and there has been no clarification on whether that staff will be absorbed into the SBA. Making matters more complicated, the SBA itself has been downsizing, announcing it would eliminate about 2,700 positions as part of an agency-wide restructuring.

Trump also confirmed that Robert F. Kennedy Jr.’s Department of Health and Human Services (HHS) will take over the Department of Education’s special needs programs and student nutrition initiatives, calling it a “rather complex” task.

“These two elements will be taken out of the Department of Education,” Trump said, “and then all we have to do is get the students to get guidance from the people that love them and cherish them.”

While Trump assured the public that Pell Grants, Title I funding, and resources for students with disabilities would be preserved, he offered no specifics on how those programs would be transitioned or managed under their new departments.

Legal experts and education advocates were quick to raise red flags. Critics argue that the plan may violate the Higher Education Act of 1965, which gives the Secretary of Education explicit authority over federal student aid programs.

“Congress has charged the secretary of education with administering the federal student aid program… The department’s Office of Federal Student Aid is statutorily mandated to do so and has the unique expertise to manage it,” said Andrew Cook, press secretary for the American Federation of Teachers (AFT).

AFT President Randi Weingarten was more direct: “See you in court.”

As Trump continues his campaign to dismantle the Department of Education, which began with an executive order earlier this week, the battle is expected to shift to the legal arena, where courts will weigh the constitutionality of shifting federal education authority without Congressional approval.