Trump’s Moves to Abolish Education Dept. Imperil Student Loan Programs
The Trump Administration’s Plans
The Trump administration is exploring ways to partially or completely eliminate the U.S. Department of Education, which has left many of the country’s 42 million federal student loan borrowers feeling anxious.
The Education Department’s Functions
One of the Education Department’s primary functions is underwriting the loans that enable millions of people each year to attend college and graduate school. It also administers the country’s $1.6 trillion outstanding education debt tab.
“The anxiety levels are pretty high for borrowers right now,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps borrowers navigate the repayment of their debt.
Closing the Agency
Closing the Education Department would require an act of Congress, experts say. However, Trump administration officials are considering an executive order that could halt parts of the agency, according to The Wall Street Journal.
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What Would Happen to My Student Loans?
Even if the Education Department no longer existed, student loan debt would still be due, Mayotte said. “Just because the entity that manages the loan changes, it in no way changes the terms [of the loan],” she said.
For example, mortgages often get sold to other companies, and millions of student loan borrowers have recently had their accounts transferred to another servicer, Mayotte added. The Treasury Department would be the next most logical agency to administer student debt, Mayotte said.
Financial Aid for New and Current Students Could be Delayed
New and current students who rely on financial aid for college would likely experience delays if the Education Department is partially or fully shut down, said Michele Shepard Zampini, senior director of college affordability at The Institute For College Access and Success.
“That would be a major problem for families,” she said. “People can’t go to college without student loans, unfortunately.”
Conclusion
The potential abolition of the Education Department has significant implications for student loan borrowers and the higher education system as a whole. While the Trump administration’s plans are still in the early stages, it is essential for borrowers to be aware of the potential consequences and to advocate for their rights.
FAQs
Q: What would happen to my student loans if the Education Department is abolished?
A: Student loan debt would still be due, and the terms of the loan would not change.
Q: Who would administer student debt if the Education Department is abolished?
A: The Treasury Department or another agency could potentially take over the administration of student debt.
Q: Would financial aid for new and current students be affected if the Education Department is abolished?
A: Yes, financial aid for new and current students could be delayed or disrupted if the Education Department is abolished.
Q: What are the implications of abolishing the Education Department for the higher education system?
A: The abolition of the Education Department could lead to chaos and disruption in the higher education system, making it difficult for students to access financial aid and complete their education.
