Trump Can’t Shut Down the Department of Education, but Student Loan Borrowers Should Beware

President Donald Trump hasn’t been shy about his desire to close the Department of Education, calling it “a big con job” as his administration began gutting it this month. But does the president have the power to shut down the Department of Education? And what would happen if he does?

“President Trump cannot shut down the US Department of Education through an executive order,” student loan expert Mark Kantrowitz said in an email. “But, if he can’t eliminate the US Department of Education, he can certainly eviscerate it.”

The Department of Education plays a pivotal role in the US education system, but may be best known for managing federal financial aid for millions of student loan borrowers. If you have federal student loans, here’s what experts say could be on the horizon if the Department of Education is shuttered.

Read more: Was SAVE Just Dealt Its Final Blow? What the Latest Court Decision Means for Student Loan Borrowers

Why does the Trump administration want to eliminate the Department of Education?

The Department of Education was created by Congress in 1979 to track, manage and coordinate education programs and procedures at the federal level. Trump advisers have said they want to call on Congress to abolish the department, a move that’s been floated over the years by Republicans but has always failed to gain widespread support.

“It is not entirely clear why Republicans want to get rid of the US Department of Education,” Kantrowitz said. “Why would you get rid of a powerful tool for implementing your education agenda?”

The Trump administration campaigned on reducing the size of the federal workforce, so shutting down the Department of Education, which employs 4,400 people, could be considered part of this agenda. The department also manages federal student loans, which Republicans have targeted since former President Joe Biden heavily supported student debt relief.

There also may be confusion about the department’s role in public education, including the mistaken belief that it controls K-12 curriculum. The Department of Education does not develop curriculum for any schools. Requirements are set at the state level, and local school boards create curriculum to meet those requirements.

For instance, Common Core, which many think of as “national standards” for education, was created as a multistate effort by the National Governors Association and the Council of Chief State School Officers to standardize education requirements around the country. However, the Department of Education wasn’t involved in the development of the standards.

Can the president shut down the Department of Education?

The president can’t unilaterally eliminate the Department of Education. That’s according to Linda McMahon, President Trump’s nominee to head the Department of Education. Shutting down the department would require an act of Congress, McMahon said at her confirmation hearing this month. Congress is unlikely to eliminate the department, since Republicans control only 53 votes in the Senate, and a 60-vote supermajority is required.

However, while closing the Department of Education entirely might be out of the president’s purview, the Trump administration has begun taking action to end specific functions and programs. Billionaire Elon Musk’s DOGE team has already begun gutting the department, terminating contracts and firing staff.

Congress could also slash the department’s budget through budget reconciliation, which only requires a simple majority. “Proposals to get rid of PLUS loans, Student Loan Interest Deduction, [American Opportunity Tax Credit], [Lifetime Learning Credit], borrower defense to repayment, closed school discharge and aspects of PSLF could be done through budget reconciliation,” Kantrowitz said.

Read more: My Monthly Student Loan Payment Could Jump From $0 to $488. Here’s How I’m Preparing

What happens to student loans if the Department of Education is eliminated?

Few experts expect the Department of Education to be wholly eliminated. Even if it is, many of its programs, including federal student loans, would likely remain in some form and move to different departments.

“Some have argued that this responsibility should fall under the Treasury, given that federal student loans are funded by the Treasury,” Elaine Rubin, a student loan policy expert and director of communications for Edvisors, said in an email.

But any shifts would take time and could cause disruptions for millions of borrowers trying to apply for or repay student loans. “Treasury lacks experience with higher education rules, so there may be some chaos,” Kantrowitz said.

Wherever student loans end up, current borrowers should expect the same terms that agreed to when they accepted the loan.

“If the student loans were transferred to another federal agency, the interest rates and terms of the loans would not change. Those terms are specified in the Master Promissory Note and in the law,” Kantrowitz said.

Read more: Student Loan Borrowers Can’t Afford to Wait Any Longer to Do These 6 Things

What about student loan forgiveness?

President Trump has made it clear he’s not in favor of broad student loan forgiveness programs, calling the Biden administration’s student loan relief efforts “a total catastrophe” during a presidential debate last year.

However, during her confirmation hearing for education secretary, McMahon told senators that the Department of Education would honor the Public Student Loan Forgiveness Program and other student loan forgiveness programs that were created by Congress.

“If we want stronger or more programs for loan forgiveness, then Congress should pass those programs, and then we would implement it,” she said. 

Eliminating the department would also not affect those borrowers whose loans have already been forgiven, according to Kantrowitz. “The president cannot claw back forgiveness that has already been provided. It is legally binding,” he said. “The courts also say that forgiveness has ‘irreversible’ impact.”

The Biden administration’s Saving on a Valuable Education plan, which had lowered monthly payments and offered additional forgiveness options, was struck down by a US appeals court ruling this week. SAVE was already on the chopping block, and the Trump administration isn’t expected to defend the plan. 

Read more: You Can’t Be Forced to Repay Forgiven Student Loans – Unless This Happens

What to do if you have student loans

For most current borrowers, the impact of eliminating the department might not be immediately apparent. “Most functions are implemented through contractors, so student loan borrowers are unlikely to notice anything different,” Kantrowitz said.

For now, borrowers who hold student loans should stay tuned for updates and prepare to restart payments if they’ve been on pause. Make sure you know who your loan servicer is and that they have your current contact information. If you’re currently enrolled in the SAVE repayment plan, expect to pay more this year. You can use the Department of Education’s loan simulator to calculate your new payment, and start considering other IDR options and saving strategies.

If you’re enrolled in PSLF and are near the 120-payment mark, you may want to consider applying for the PSLF buyback program. It allows you to “buy back” no-payment months not counted toward forgiveness while your loans were in forbearance or deferment. Although the PSLF program may still be safe, the buyback program could go away so now’s the time to take advantage.