Education Department Eliminates 1,300 Jobs. How Will Changes Affect Student Loans?

Mar. 15, 2025

Donald Trump (left); The U.S. Department of Education in Washington D.C. (right).Photo:Anna Moneymaker/Getty; Sipa via AP Images

Anna Moneymaker/Getty; Sipa via AP Images

The Department of Education is implementing mass layoffs just days after PresidentDonald Trumpsuggested the agency should not handle student loans.

On Tuesday, March 11, the Department of Education announced plans tolay off over 1,300 employees, “impacting nearly 50% of the Department’s workforce.”

Secretary of Education Linda McMahon called the move “a significant step toward restoring the greatness of the United States education system.”

“Today’s reduction in force reflects the Department of Education’s commitment to efficiency, accountability, and ensuring that resources are directed where they matter most: to students, parents, and teachers,” she added.

Critics have denounced the decision. Sen. Patty Murphy, a Democrat from Washington, claimedin a statementthat Trump and his allies are “robbing our students and teachers of the resources and support they need, so that Republicans can pay for more massive tax cuts for billionaires.”

In a separate statement, Sen. Tammy Duckworth, a Democrat from Illinois, said that a “chainsaw” has been taken to the department’s workforce, allowing Trump andElon Muskto jeopardize “critical support for teachers, loan assistance for student borrowers and the promise of a quality education for our kids—especially those with disabilities and those living in low-income areas.”

The US Department of Education headquarters in Washington, DC, US, on Wednesday, March 12, 2025.Al Drago/Bloomberg via Getty

Al Drago/Bloomberg via Getty

If the Department of Education is eliminated, another agency would be tasked with taking over the handling of federal student loans. In addition to the SBA, the Treasury and Commerce departments have also been floated as agencies that could possibly take on the responsibility.

“For a lot of the student loan repayment plans, you need income verification,” said Andrew Gillen, research fellow at the Cato Institute for Economic Freedom,USA Todayreported. “Treasury already has that. So just from an administrative perspective, Treasury already has a lot of information that is necessary to implement the student loan programs.”

But the agency’s closure would likely “create chaos” among borrowers, said Michele Shepard Zampini, senior director of college affordability at The Institute For College Access and Success, toCNBC. She pointed out that new and current students dependent on financial aid would experience delays.

Mark Kantrowitz, a higher education expert, also told the outlet that federal student aid might not be available “for weeks or longer” if the department is eliminated. “Disruption is bad, very bad,” he said.

The move comes five days after Trump, 78, told reporters in the Oval Office that he had discussed moving the Federal Student Aid office to another agency, such as the Small Business Administration.

Donald Trump on March 7, 2025.Anna Moneymaker/Getty

Anna Moneymaker/Getty

“I don’t think the Education [Department] should be handling the loans,” Trump said on Thursday, March 6. “That’snot their business.”

Trump has also suggested his administration could eliminate the department as a whole, telling reporters in February that the department was “a big con job” and that he would “like to close it immediately.”

Linda McMahon on March 7, 2025.Noam Galai/Getty

Noam Galai/Getty

At her confirmation hearing in February, McMahon said closing the department “certainly does require congressional action.” Still, she insinuated that changes would be made.

“We’d like to make sure that we are presenting a plan that I think our senators could get on board with, and our Congress could get on board with, that would have a better functioning Department of Education,” she told senators, theAssociated Pressreported.

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The president is planning to sign an order instructing McMahon to begin dismantling the department, according toCNNandThe New York Times.

Speaking withFox Newshost Laura Ingraham after Tuesday’s layoff announcement, McMahon confirmed Trump’s plans to shut down the department she currently runs.

“His directive to me, clearly, is to shut down the Department of Education,” she explained, adding, “we know we’ll have to work with Congress to get that accomplished.”

source: people.com