Trump Wants to Close the Education Department. Here’s What That Might Mean for Students’ Financial Aid.
Credit: John M. Chase / Getty Images- President Donald Trump and his allies are looking to eliminate the Department of Education. It’s unclear what the next steps for the department’s programs would be.
- The department oversees around $1.6 trillion in student loan debt, about 17.6 million FAFSA forms, and $120.8 billion in grant, work-study, and loan funds for 9.9 million students.
- The Trump administration has floated moving financial aid under the Treasury Department.
- The Department of Education has about 4,245 employees and an annual budget of $79 billion. It is one of the smaller federal departments.
President Donald Trump wants his pick to run the U.S. Department of Education (ED), Linda McMahon, to “put herself out of a job.”
Trump announced his vision for ED from the Oval Office following reports that he is working on an executive order to start the process to eliminate the cabinet-level department.
In his Feb. 4 remarks, Trump focused mostly on K-12 education, indicating that he wanted to “let the states run schools.”
But ED also manages federal financial aid and student loan programs. Nearly three-quarters of all undergraduate college students receive some type of financial aid. The department’s closure would impact trillions of dollars in loans, grants, and scholarships. Even if ED shrinks or shutters, some congressionally appropriated financial aid — like Pell Grants and federal work-study — wouldn’t go away. But there could be disruptions.
Here’s what ED does for college students and what it could mean for them if Trump succeeds in shuttering it.
What Does the Education Department Do for College Students?
The Department of Education was created by Congress in 1979, but since the U.S. Constitution does not create a federal role for education, its responsibilities are designated by Congress.
ED employs about 4,245 people, according to the Office of Personnel Management, and has one of the smallest staffs of the cabinet-level departments. It has an annual budget of $79 billion. Compared to the cost of other departments, ED is fairly small potatoes at less than 3% of all federal spending.
But it has a big impact on higher education, with its office of Federal Student Aid (FSA) distributing some $120.8 billion in grant, work-study, and loan funds each year to help more than 9.9 million students and their families pay for college or career school.
Much of those funds are distributed via the Free Application for Federal Student Aid (FAFSA), and ED processes some 17.6 million forms every year from students trying to advance their education.
The U.S. federal student loan debt is at $1.6 trillion. And this year, for the first time in roughly five years, borrowers who have defaulted on their federal student loan debt will face collections, including wage garnishment.
One other vital service ED provides is maintaining and collecting data on colleges and universities that students, families, policymakers, researchers, and journalists can use to compare, track, and explore.
While Trump has talked about removing “wokeness” from schools, ED does not actually dictate what is taught at K-12 schools, colleges, or universities.
Republicans have tried for years to abolish this department, but these efforts previously became more “performative rather than practical” when it came time to cut congressionally appropriated funding for federal financial aid.
Under past administrations, Congress and the president have disagreed about how much funding to cut from the department budget, and Congress has historically appropriated more funding than what the president asked.
A 2024 survey from Pew Research showed that 45% of Americans have an unfavorable view of the Department of Education, while 44% have a favorable opinion. A poll taken from Jan. 31-Feb. 2, 2025, by Data for Progress, shows that a majority of voters across age and education lines oppose abolishing ED.
How Might College Students Be Impacted if Trump Succeeds?
Trump’s Oval Office remarks were the most details he has provided on his vision for ED, but a look at his first term provides some perspective on what may happen if he succeeds in closing it.
Trump in spring 2017 floated the idea of moving federal financial aid under the Treasury Department and other ideas in the ether would see some financial aid be managed by states.
However, he goes about shrinking the department, an executive order alone cannot dissolve it.
ED programs such as the Higher Education Act (HEA) and Title IV funds predate its creation and may be safe because funding is determined and approved by Congress.
The Pell Grant program, for example, is primarily funded through annual discretionary appropriations through Congress and mandatory appropriations provided by the HEA. Pell Grants also receive strong bipartisan support in Congress.
Federal work-study grants are also appropriated by Congress.
While the funds for those grants wouldn’t go away with an executive order, there is a potential for students to see disruptions if the grants were to be managed by another department or by a smaller ED staff.
If federal student loans face disruptions, students may move to private lenders, where they may be subject to higher interest rates and fewer repayment or forgiveness options.
And as ED resumes full loan repayment for those with federal student loan debt, millions of borrowers may find themselves having to make payments even as those loans are transferred elsewhere, such as to the Treasury Department or to private lenders.
While Trump’s plans remain nebulous, educators and advocates with the National Education Association are warning that dismantling the Department of Education would be “catastrophic.”
Experts warn potential budget cuts and restructuring could erode the department’s authority and capabilities and could strain other departments if its operations were absorbed by another department.