What happens to student loans as Trump moves to dismantle the Education Department?
Moving to fulfill a campaign promise, President Donald Trump signed an executive order Thursday calling for the dismantling of the Education Department.
The department's main role is financial, and questions remain about the administration's plan for managing federal student loans.
The Department of Education manages approximately $1.5 trillion in student loan debt for over 40 million borrowers.
Closing the department would mean redistributing the management to another agency. However, the department has struggled to find a viable alternative agency to manage its massive student debt portfolio, according to two sources involved in the discussions.
White House press secretary Karoline Leavitt announced ahead of the executive order鈥檚 signing on Thursday that certain 鈥渃ritical functions鈥� like student loans and administering grants to at-risk students would remain with the Department of Education, but Trump later said those functions would be redistributed to other agencies.
The discrepancy could set up a challenge for Education Secretary Linda McMahon, who is required by law to carry out some of the department鈥檚 congressionally mandated functions, including administering loans and providing grants for schools in high-poverty areas.
The president had previously suggested that the portfolio 鈥� which is larger than all but three U.S. banks 鈥� would be transferred to the Treasury Department or Small Business Administration, though those plans have not taken shape.
鈥淭reasury doesn鈥檛 want it,鈥� according to one of the sources involved in the discussions, who said that no conversations about moving it to the Small Business Administration had advanced.
President Joe Biden's administration made the cancellation of student loans a signature effort of the department's work. Even though the Supreme Court overturned Biden鈥檚 initial attempt to cancel student loans, the administration forgave over $175 billion for more than 4.8 million borrowers through a range of changes to programs it administers, such as Public Service Loan Forgiveness.
Trump has criticized Biden's efforts to cancel debt as illegal and unfair, calling it a 鈥渢otal catastrophe鈥� that 鈥渢aunted young people.鈥�
