• At the end of March, President Trump signed an executive order to close the U.S. Department of Education, along with some instructions for reorganization.
• Congress would need to vote to dismantle the department entirely, but many changes can and are taking place.
• Many questions remain about this transition, like what it means for student loans, civil rights enforcement, and future federal education reforms.

​Several members of the Utah State Board of Education want to send President Trump a letter supporting his recent executive order to close the U.S. Department of Education, a change Utah Governor Spencer Cox has also publicly supported.

As discussed in a recent Defending Ideas podcast episode, many conservatives have longed for the department’s dismantling, but the likelihood and logistics of eliminating it matters.

What this looks like will become clearer over time, but Trump has given some specific directives on the change. Here are some key details about what we know so far, as well as unanswered questions state leaders should consider.

What we know about this change

Essential student funding will continue

Established in 1979, the U.S. Department of Education oversees student loan programs, administers Pell Grants (a grant that helps low-income students attend college), disperses funds to help students in high-poverty schools or students with disabilities, and enforces civil rights law aimed at preventing race- and sex-based discrimination in education.

In 2024, the Department of Education had a budget of $238 billion (less than 2% of the federal budget). For the same year, the Education Data Initiative estimated that $17,280 was spent per pupil, totaling around $857 billion on primary and secondary education.

With the call to dismantle, many are left wondering what will happen to these vital education programs. What is the President’s reply?

President Trump said, “Pell Grants, Title 1, funding resources for children with disabilities and special needs will be preserved, fully preserved. They’re going to be preserved in full and redistributed to various other agencies and departments that will take very good care of them.”

During her confirmation hearing, U.S. Secretary of Education Linda McMahon said, “It’s not the President’s goal to defund the programs. It was only to have it operate more efficiently.” In a more recent speech, she said, “When I took the oath of office as Secretary of Education, I accepted responsibility […]  for supporting over 100 million American children and college students who are counting on their education to create opportunity and prepare them for a rewarding career.”

The student loans portfolio is moving to SBA

Regarding oversight of $1.777 trillion in loans for 42.7 million student borrowers, President Trump has announced that the student loans portfolio will “immediately” be moved to the Small Business Administration (SBA), a federal agency established in 1953 that aims to support small businesses through providing loans, grants, and resources to promote growth and disaster recovery.  

This is not the first time that student loans have been housed under a different federal agency. In 1958, President Eisenhower signed the National Defense Education Act, the bill that created the National Defense Student Loan Program, which established the first federal loan program. In 1965, President Johnson signed the first Higher Education Act, establishing Guaranteed Student Loans, a federally backed program that created public-private partnerships that enabled banks to offer financial assistance to low- and middle-income students. Until 1979, these programs were housed under the U.S. Department of Health, Education, and Welfare, the predecessor to both the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Education.

Programs for special needs and school nutrition programs are moving to HHS

For the 7.5 million children with disabilities using special education programs (designed to support students with disabilities and special needs through Individualized Education Plans (IEPs) and other forms of specialized instruction), these programs will be rehoused under the U.S. Department of Health and Human Services. This Department, established in 1979, holds the responsibility of protecting the health and well-being of Americans through a wide range of programs from Medicare and Medicaid to human services like child welfare and food and medical research. School nutrition programs will be reallocated to this department as well.

Unanswered questions

What happens if Congress doesn’t act to eliminate the department?

To actually eliminate the department, Congress would need to act. Though some in Congress immediately signaled their willingness to push through legislation, the odds of getting enough votes to pass anything are not good. What the executive order can accomplish without Congress is a little less clear. The executive order’s language is actually limited, stating that the secretary shall “facilitate the closure of the Department of Education” with the caveat to the “extent appropriate and permitted by law.” The U.S. Secretary of Education said she would work with state leaders and Congress “to ensure a lawful and orderly transition.” Still, without Congress, this may simply be a major reorganization of the department and a reduction in the workforce, which is already underway.

What will this mean for current and prospective student loan borrowers?

There is a fair amount of uncertainty over what this change really means for student loan borrowers. To start, some argue that Trump’s decision to move the student loan portfolio to the SBA is illegal since the language of statutes refers to the Secretary of the Department of Education. Aside from legal questions, Trump claims that the changes will be better for student loan borrowers, but there is concern that this switch to SBA for oversight will lead to more confusion than clarity. We might consider whether this concern might ultimately impact the number of people seeking federal aid or loan forgiveness, whether by choice or logistics. State and education leaders should consider what this means in light of a declining sentiment that college is worth its value. 

What will happen to the enforcement of civil rights in schools?

The Office of Civil Rights currently resides within the Department of Education, but it already often works with the U.S. Department of Justice. The Justice Department, established in 1870 with the purpose of overseeing federal law enforcement and ensuring the delivery of justice throughout the country, is the agency most likely expected to take over the responsibilities of enforcing the Civil Rights Act of 1964 and Title IX in schools if a transition were to take place. However, this change has yet to be announced.

Will the nature of federal funds become more flexible at the state level?

Reorganizing a federal department is just one step in reform, especially since it appears the goal is to leave federal funding streams in place and programs functioning. Yet, there has been talk in recent years about making federal funds more flexible, offering states block grants or allowing federal funds to be used like an education savings account. If the goal is to “return authority of education to the States,” then there are additional reforms that could aid in doing so. It remains to be seen whether members of Congress will be emboldened to pass these types of reforms with the closure of this federal department or will pause while these significant changes get ironed out. In this time of change, now may be the time for state policymakers to support these reforms.

Conclusion

Even with the little information we currently have and the questions that remain, reorganizing the U.S. Department of Education will likely benefit state leaders, local education leaders, and families.