The Trump administration has moved decisively towards dismantling the federal Department of Education, saying a landmark interagency settlement that shifts student loan operations to the Department of the Treasury. The switch positions the Treasury to handle defaulted federal student loans and help reimbursement efforts, marking what officers describe as the biggest step but in a multiphase plan to redistribute the division’s duties.Officials argue that the transfer goals to streamline federal packages, scale back taxpayer losses, and display that the division is just not important for the administration of student support. Nicholas Kent, Undersecretary of Education, instructed Fox News Digital, “I think we’ve been very clear about this last week that this is a multiphase process.”
Treasury takes operational management of student loans
The settlement assigns the Treasury full operational duty for gathering on defaulted federal student loans and offering operational help to return debtors to reimbursement. Andrew Gillen of the Cato Institute emphasised the importance of the switch, telling Fox News Digital, “Whereas this student loan move–this is the biggest staffing and the biggest budgetary component of the Department of Education. So, if it’s sent over to Treasury, this really does indicate that this is moving a substantial portion of the Department of Education elsewhere.”Kent echoed the evaluation, stating to Fox News Digital, “Characterizing it as the next and largest step toward winding down the Department of Education is absolutely the right way to think about it.”
Campaign promise turns into coverage
The switch fulfills President Donald Trump’s marketing campaign promise to remove the Department of Education. During the 2024 marketing campaign, Trump signed an government order instructing his administration to start disbanding the company. Kent defined to Fox News, “The Secretary has been on the record saying that these interagency agreements are proof of concept, that we want to show Congress, that we want to show families, that we want to show moms and dads and families that the Department of Education does not need to be here for federal grant aid and federal student loans to continue flowing to borrowers.“
Streamlining support and decreasing prices
The administration framed the shift as a means to scale back paperwork and enhance effectivity. The division reported that federal student loans now complete almost $1.7 trillion, with lower than 40% of debtors in reimbursement plans and roughly 25% in default.Gillen stated to Fox News, “This will benefit students by streamlining the aid application and student loan repayment processes and save taxpayers money by reducing losses on student loans. Once the move is complete, Education’s biggest budgetary and staffing requirements will be handled elsewhere, which will make it much more feasible to shut down the Department of Education.”Secretary of Education Linda McMahon emphasised the broader reforms in a press launch, “Cutting through layers of red tape in Washington is one essential piece of our final mission. As we partner with these agencies to improve federal programs, we will continue to gather best practices in each state through our 50-state tour, empower local leaders in K-12 education, restore excellence to higher education, and work with Congress to codify these reforms.“
Proof of idea for closure
Kent detailed the progress over the previous 12 months to Fox News Digital, “In over a year, we have reduced the size of the department by over 40%. We have entered into 10 interagency agreements. We have done multiple staff details for other agencies where staff who are in the department are literally physically sitting at other agencies. We are showing Congress and others that this proof of concept works and that we want to continue to work with Congress to memorialize these changes in legislation and with the ultimate goal of closing down the department and putting ourselves out of a job.“With student loan duties shifting to the Treasury, officers contend that a good portion of the Department of Education’s core capabilities will function exterior the company, bringing the federal authorities nearer to what many see because the endgame: a totally dismantled division.
