On March 20, 2025, President Trump signed an executive order to begin dismantling the Department of Education (ED) and transitioning key responsibilities to states. Specifically, the order directs Secretary Linda McMahon “to take all necessary steps to facilitate the closure (of) the Department of Education and return education authority to the States, while continuing to ensure the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely.”
While President Trump’s recent actions continue to make the Department of Education much smaller, he does not have the legal authority to abolish the department entirely. Even under this new executive order, the department will continue managing critical department duties, including federal student loan programs such as PSLF and Income-Driven Repayment (IDR) Plans.
President Trump has continued to indicate his desire to move the servicing of federal student loans to other agencies, such as the Small Business Administration (SBA). No such official transition has begun, but we are monitoring the situation closely and will continue to provide updates.
This new executive order arrives after ED fired more than half of its workforce last week, and President Trump issued an executive order limiting certain eligibility criteria for Public Service Loan Forgiveness (PSLF) (read about these changes here).
These changes will continue to increase servicer wait times and decrease system reliability, even as the student loan programs passed by Congress remain structurally in place. We’re encouraging borrowers to be proactive and backup copies of their most important student loan documents. You can learn what you should backup and how to do so here: https://bysavi.zendesk.com/hc/en-us/articles/38449213209619-How-to-Download-and-Save-Your-Student-Loan-Records
This is a developing situation, and as we have more information on this order we will update our users.
Here is a copy of the executive order:
Section 1. Purpose and Policy. Our Nation’s bright future relies on empowered families, engaged communities, and excellent educational opportunities for every child. Unfortunately, the experiment of controlling American education through Federal programs and dollars — and the unaccountable bureaucracy those programs and dollars support — has plainly failed our children, our teachers, and our families.
Taxpayers spent around $200 billion at the Federal level on schools during the COVID-19 pandemic, on top of the more than $60 billion they spend annually on Federal school funding. This money is largely distributed by one of the newest Cabinet agencies, the Department of Education, which has existed for less than one fifth of our Nation’s history. The Congress created the Department of Education in 1979 at the urging of President Jimmy Carter, who received a first-ever Presidential endorsement from the country’s largest teachers’ union shortly after pledging to the union his support for a separate Department of Education. Since then, the Department of Education has entrenched the education bureaucracy and sought to convince America that Federal control over education is beneficial. While the Department of Education does not educate anyone, it maintains a public relations office that includes over 80 staffers at a cost of more than $10 million per year.
Closing the Department of Education would provide children and their families the opportunity to escape a system that is failing them. Today, American reading and math scores are near historical lows. This year’s National Assessment of Educational Progress showed that 70 percent of 8th graders were below proficient in reading, and 72 percent were below proficient in math. The Federal education bureaucracy is not working.
Closure of the Department of Education would drastically improve program implementation in higher education. The Department of Education currently manages a student loan debt portfolio of more than $1.6 trillion. This means the Federal student aid program is roughly the size of one of the Nation’s largest banks, Wells Fargo. But although Wells Fargo has more than 200,000 employees, the Department of Education has fewer than 1,500 in its Office of Federal Student Aid. The Department of Education is not a bank, and it must return bank functions to an entity equipped to serve America’s students.
Ultimately, the Department of Education’s main functions can, and should, be returned to the States.
Sec. 2. Closing the Department of Education and Returning Authority to the States. (a) The Secretary of Education shall, to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities while ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely.
(b) Consistent with the Department of Education’s authorities, the Secretary of Education shall ensure that the allocation of any Federal Department of Education funds is subject to rigorous compliance with Federal law and Administration policy, including the requirement that any program or activity receiving Federal assistance terminate illegal discrimination obscured under the label “diversity, equity, and inclusion” or similar terms and programs promoting gender ideology.
Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.