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President Donald Trump announced Friday that two major functions currently overseen by the Department of Education will be transferred to other federal agencies. The Small Business Administration (SBA) will take over the management of student loans, while the Department of Health and Human Services (HHS) will assume responsibility for special needs and nutrition programs.
Student Loans to Be Handled by SBA
“I do want to say that I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, [who] is a terrific person, will handle all of the student loan portfolio,” Trump stated.
He described the student loan system as a “very large” and “complicated deal,” involving “tens of thousands of loans.” Trump emphasized that moving student loan oversight away from the Department of Education would improve service efficiency. “And that’s coming out of the Department of Education immediately,” he said, adding that he believes the loans will be “serviced much better” under the SBA’s management.
Currently, the Federal Student Aid Office within the Department of Education oversees student loans, managing a $1.6 trillion portfolio that serves 43 million borrowers.
Concerns Over SBA’s Capacity to Manage Student Loans
Despite Trump’s confidence in the SBA, concerns remain about its capacity to handle such a significant expansion of responsibilities. The SBA, which already manages billions of dollars in loans annually, has been subject to staffing reductions under the Trump administration. As part of an agency-wide reorganization, the SBA announced plans to cut its workforce by 43%.
According to the agency, the restructuring will result in the elimination of “approximately 2,700 active positions out of a total active workforce of nearly 6,500 through voluntary resignations, the expiration of COVID-era and other term appointments, and a limited number of reductions in force.”
Meanwhile, the Federal Student Aid Office currently employs over 1,000 workers dedicated to student loan servicing. It remains unclear whether these employees will be transferred to the SBA or how the agency will manage the added workload.
HHS to Oversee Special Needs and Nutrition Programs
In addition to the student loan transition, Trump confirmed that special needs and nutrition programs would be shifted to the Department of Health and Human Services. However, he did not elaborate on how the transition would be implemented or what changes, if any, would be made to these programs under the new department.
The move comes as part of Trump’s broader effort to dismantle the Department of Education, a longstanding goal of some conservative policymakers. The implications of these shifts remain uncertain, as federal agencies prepare to adapt to their expanded responsibilities.
Also Read: Trump Signs Executive Order To Fuly Dismantle Department Of Education: “We’re Going To Eliminate It”
