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Trump Administration Moves to Dismantle Department of Education, Raising Concerns Over Student Loan Management

The executive order to shut down the agency has sparked uncertainty for 45 million borrowers and critical federal loan programs.

Dozens of people gather in downtown Niles, Mich., Thursday, March 20, 2025, to protest recent government cuts in the Department of Education.
President Donald Trump and poses with U.S. Education Secretary Linda McMahon after he signed an executive order to formally begin the process of dismantling the Education Department.

Overview

  • President Trump signed an executive order to dismantle the Department of Education, citing inefficiencies in managing the $1.7 trillion federal student loan portfolio.
  • The Department has cut its workforce by 50%, raising concerns about its ability to oversee loan repayment and financial aid systems.
  • Ashley Morgan, a borrower whose payments spiked after the removal of income recertification forms, has filed a lawsuit against the Department of Education.
  • Key programs like Public Service Loan Forgiveness and income-driven repayment plans are at risk of being eliminated, potentially affecting millions of borrowers.
  • Critics warn that privatizing federal loans, a goal tied to the Heritage Foundation's Project 2025, could lead to stricter terms and reduced borrower protections.