Trump Restructures Federal Student Loan Management

President Trump has announced a significant restructuring of federal student loan management by transferring responsibilities from the Department of Education to the Small Business Administration (SBA) and shifting special needs and nutrition programs to the Department of Health and Human Services (HHS). This move follows an executive order to dismantle the Department of Education, although a complete closure requires Congressional approval. The SBA, which will now handle the $1.6 trillion student loan portfolio, has simultaneously announced a 43% workforce reduction, raising concerns about its capacity to manage the expanded responsibilities. While Trump claims the SBA will improve loan servicing, critics worry about potential disruptions to repayment plans and loan forgiveness programs. The decision has sparked legal and operational challenges, as the transition raises questions about the SBA's ability to manage such a significant increase in scope and scale. The administration's efforts to eliminate parts of the Department of Education are part of a broader attempt to reduce federal involvement in education, emphasizing state and local control.