The Small Business Association will now oversee the federal student loan portfolio, a task that the Department of Education, which President Donald Trump took executive action to scale back this week, used to manage.
“I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, a terrific person, will handle all of the student loan portfolio. We have a portfolio that’s very large,” Trump said from the Oval Office on Friday. The Education Department is “not a bank,” Trump added, and must “return bank functions to an entity equipped to serve America’s students.”
Roughly 43 million borrowers have amassed about $1.6 trillion in student loans. The department’s office of Federal Student Aid used to oversee the program, which was moved to the SBA shortly after Trump took major steps to cut down on bureaucratic bloat in the Education Department.
“As the government’s largest guarantor of business loans, the SBA stands ready to deploy its resources and expertise on behalf of America’s taxpayers and students,” Loeffler said.
The Education Department’s “special needs” programs will be moved to Health and Human Services, Trump said, and will be managed by agency head Robert F. Kennedy Jr. Kennedy is “fully prepared to take on the responsibility of supporting individuals with special needs,” the HHS secretary said.
Special-education programs were HHS’s responsibility until 1979, when the agency was the Department of Health, Education, and Welfare.
White House Press Secretary Karoline Leavitt clarified that “the President has always said Congress has a role to play in this effort, and we expect them to help the President deliver.” To move the federal student loan portfolio across agencies will likely require congressional action, as would shuttering the Education Department altogether. Trump has made it clear that he’d like to do both.
The shake-up comes one day after Trump signed an executive order asking Education Secretary Linda McMahon to “take all necessary steps to facilitate the closure of the Department of Education.” The order elaborated on a longtime promise of Trump’s to dismantle the DOE, a goal Republicans have worked toward since Ronald Reagan was president.
This month, McMahon announced plans to fire nearly 50 percent of Education’s workforce. The department has also cut around $1 billion worth of federal grants to organizations that promote diversity, equity, and inclusion, and critical race theory.
“Our job is to respect the will of the American people and the president they elected, who has tasked us with accomplishing the elimination of bureaucratic bloat here at the Department of Education — a momentous final mission — quickly and responsibly,” McMahon said on March 3.
“Removing red tape and bureaucratic barriers will empower parents to make the best educational choices for their children,” she continued. “An effective transfer of educational oversight to the states will mean more autonomy for local communities. Teachers, too, will benefit from less micromanagement in the classroom — enabling them to get back to basics.”