Overview

• President Trump signed an executive order dismantling the Department of Education and transferring federal student loans to the Small Business Administration (SBA).
• The SBA, which is reducing its workforce by 40%, has no prior experience managing student loans, raising concerns about its capacity to handle the $1.6 trillion portfolio.
• Income-driven repayment plans remain inaccessible following a court ruling, leaving millions of borrowers in financial limbo without clear guidance.
• Advocates are urging borrowers to document repayment histories and seek congressional assistance as the administration has yet to provide detailed transition plans.
• Critics warn that the lack of planning could lead to severe disruptions, with some speculating the administration may aim to privatize the federal student loan program.