WASHINGTON (NEXSTAR) – President Donald Trump unveiled a major change to the U.S. education system on Friday, announcing plans to move the federal government’s $1 trillion student loan portfolio from the Department of Education to the Small Business Administration (SBA). The move comes as part of ongoing efforts to dismantle the Department of Education.
The president said that the SBA is “set for it” and that the loan servicing would be improved under the agency’s management, which he described as having previously been a “mess.”
“The portfolio’s very large, lots of loans. Tens of thousands of loans,” Trump said while speaking to reporters in the Oval Office, highlighting the size of the government’s student loan program.
However, critics of the plan, including James Kvaal, the former Undersecretary of Education under the Biden administration, shared concerns about the SBA’s ability to effectively manage such a large and complex debt portfolio.
“I think it’s going to be very disruptive,” Kvaal said, pointing out the SBA’s lack of experience in handling student debt.
Trump also announced that protections for students with disabilities and school food programs would also be moved to the Department of Health and Human Services (HHS). Kvaal, argue that this could undermine enforcement and the effectiveness of these programs in schools.
“They’ve already done a lot of damage to the capacity to run these programs effectively,” Kvaal stated.
At the White House, Education Secretary Linda McMahon defended the administration’s decision. She pointed out that funding for students with special needs had been effectively managed before the creation of the Department of Education and expressed confidence that the transition would be smooth.
“It was handled very well before there was a Department of Education, and it will be handled very well again,” McMahon said. “Hopefully, as the president said, there will be more money going to the states, not less.”
While the president’s plan represents a major shift in federal education policy, only Congress has the authority to fully shut down the Department of Education, meaning further legislative action will be required for a complete overhaul.
