03/30/2025

Here’s What Happens to Student Loans if the Department of Education Disappears

Moving federal student loans to another agency is the administration's latest proposal

Continuing its adherence to the tech industry’s motto of "move fast and break things," the current administration has recently put the U.S. Department of Education (DoE) on the chopping block. This 46-year-old institution (yes, it really is younger than the original Star Wars) oversees federal education policy, ensures equal access to education, and administers the federal student loan program.

As a recovering high school English teacher, I would argue that all of the DoE’s responsibilities are vital to our nation and shouldn’t be part of the Taxes Chainsaw Massacre. And I’m glad our executive branch cannot dismantle the Department of Education without Congressional approval. But that doesn’t change the fact that the Secretary of Education has slashed the DoE workforce, and the president has floated the idea of moving student loan responsibilities to a different department, like the Small Business Administration (SBA).

So, where does the proposed dismantling of the Department of Education leave federal student loan borrowers? Borrowers are subject to the legal loan contracts they signed with the DoE. This means the potential chaos could cause some localized chaos in the vicinity of your bank account.

Please select this link to read the complete article from Fast Company.