Overview:
President Donald Trump announced the transfer of federal student loan management to the Small Business Administration and special needs funding oversight to the Department of Health and Human Services as part of his executive order to begin dismantling the Department of Education.
President Donald Trump announced Friday that the Small Business Administration (SBA) will assume responsibility for the federal student loan portfolio. At the same time, the Department of Health and Human Services (HHS) will oversee funding for special needs students. The decision follows his executive order signed earlier in the day, initiating the process to dismantle the Department of Education.
“I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, a terrific person, will handle all of the student loan portfolio,” Trump told reporters in the Oval Office Friday. “We have a portfolio that’s very large, lots of loans, tens of thousands of loans, pretty complicated deal, and that’s coming out of the Department of Education immediately, and it’s going to be headed up by Kelly Loeffler, SBA, in the role set for it.”
The federal student loan portfolio, totaling approximately $1.8 trillion, has presented significant management challenges, with around 40% of loans past due, according to sources involved in the transition. Education officials had reportedly struggled to identify an alternative agency to oversee loan servicing before the decision to transfer oversight to the SBA.
Trump also announced that HHS Secretary Robert F. Kennedy Jr. will manage funding for special needs students, including nutrition programs and related services. “It’s a complex system, but HHS is well-equipped to handle it,” Trump added.
While the complete dissolution of the Department of Education requires congressional approval, Education Secretary Linda McMahon has been directed to begin the transition process. The administration maintains that education funding and essential student services will continue without disruption. However, the restructuring is expected to prompt debate over the future role of federal oversight in education.
