A Big Shakeup in Washington — and What It Means for Borrowers
President Donald Trump just signed an executive order aimed at dismantling the U.S. Department of Education — and it’s raising serious questions for the 40+ million Americans with federal student loans.
While only Congress can officially eliminate the Department of Education, the Trump administration has already laid off nearly half its workforce. That’s left the agency with fewer than 2,200 employees, down from over 4,000 just a few years ago.
So… what now?
Could Student Loans Be Handed Off to Another Agency?
Yes — and that’s exactly what the administration is signaling.
President Trump has suggested that federal student loans should be moved to another department, possibly:
- The Treasury Department (which already collects past-due debts)
- The Commerce Department
- Or even the Small Business Administration
Most experts say Treasury makes the most sense, but moving such a massive, complex program won’t be easy — or quick.
What Borrowers Should Know Right Now
Here’s the most important part:
💡 Your student loan contract still holds.
Even if the Education Department is stripped down or replaced, your loan terms can’t be changed just because management shifts.
When you signed your Master Promissory Note, you locked in:
- Your interest rate
- Your payment schedule
- Your eligibility for programs like income-driven repayment and Public Service Loan Forgiveness (PSLF)
Forgiveness Programs Could Be Slowed or Stalled
This shakeup couldn’t come at a worse time for many borrowers, especially those:
- Applying for income-driven repayment (IDR) forgiveness
- Seeking disability discharge
- Working toward PSLF
Why?
Because the Education Department still oversees the final approval for all forgiveness programs — and with fewer staff and more chaos, applications could stall.
What Should You Do Now?
If you’ve got student loans, here are 5 steps to take today:
- ✅ Log into your loan servicer’s website and confirm your contact info
- ✅ Download your full payment history for your records
- ✅ Double-check your current repayment plan
- ✅ If you’re pursuing forgiveness, keep copies of all paperwork and submit updates early
- ✅ Start or revisit your debt payoff plan — because relying on government forgiveness may get harder before it gets easier
Bottom Line: Change Is Coming, But You’re Not Powerless
We don’t know exactly what the future holds for the Department of Education — or for federal student loans — but we do know this:
You can still take charge of your money.
At AWayOutOfDebt.com, we’re tracking all the latest changes and helping everyday people find practical ways to beat debt, build margin, and get back in control.
💡 Get Started:
👉 [Download the Debt-Free Checklist (Free)]
👉 [Subscribe for Updates on Student Loan Changes]
👉 [Explore the Six-Week Turnaround Course]