President Donald Trump hasn’t been shy about his need to shut the Department of Education, calling it “a big con job” as his administration started gutting it this month. But does the president have the facility to close down the Department of Education? And what would occur if he does?”President Trump cannot shut down the US Department of Education through an executive order,” scholar mortgage professional Mark Kantrowitz mentioned in an electronic mail. “But, if he can’t eliminate the US Department of Education, he can certainly eviscerate it.”The Department of Education performs a pivotal position within the US training system, however could also be greatest identified for managing federal monetary support for tens of millions of scholar mortgage debtors. If you may have federal scholar loans, here is what specialists say may very well be on the horizon if the Department of Education is shuttered.Read extra: Was SAVE Just Dealt Its Final Blow? What the Latest Court Decision Means for Student Loan BorrowersWhy does the Trump administration need to remove the Department of Education?The Department of Education was created by Congress in 1979 to trace, handle and coordinate education schemes and procedures on the federal stage. Trump advisers have mentioned they need to name on Congress to abolish the division, a transfer that is been floated through the years by Republicans however has all the time failed to realize widespread assist.”It is not entirely clear why Republicans want to get rid of the US Department of Education,” Kantrowitz mentioned. “Why would you get rid of a powerful tool for implementing your education agenda?”The Trump administration campaigned on lowering the scale of the federal workforce, so shutting down the Department of Education, which employs 4,400 folks, may very well be thought of a part of this agenda. The division additionally manages federal scholar loans, which Republicans have focused since former President Joe Biden closely supported scholar debt aid.There additionally could also be confusion concerning the division’s position in public training, together with the mistaken perception that it controls Ok-12 curriculum. The Department of Education doesn’t develop curriculum for any colleges. Requirements are set on the state stage, and native faculty boards create curriculum to fulfill these necessities.For occasion, Common Core, which many consider as “national standards” for training, was created as a multistate effort by the National Governors Association and the Council of Chief State School Officers to standardize training necessities across the nation. However, the Department of Education wasn’t concerned within the growth of the requirements.Can the president shut down the Department of Education?The president cannot unilaterally remove the Department of Education. That’s in response to Linda McMahon, President Trump’s nominee to go the Department of Education. Shutting down the division would require an act of Congress, McMahon mentioned at her affirmation listening to this month. Congress is unlikely to remove the division, since Republicans management solely 53 votes within the Senate, and a 60-vote supermajority is required.However, whereas closing the Department of Education fully is perhaps out of the president’s purview, the Trump administration has begun taking motion to finish particular features and applications. Billionaire Elon Musk’s DOGE group has already begun gutting the division, terminating contracts and firing employees.Congress may additionally slash the division’s finances by way of finances reconciliation, which solely requires a easy majority. “Proposals to get rid of PLUS loans, Student Loan Interest Deduction, [American Opportunity Tax Credit], [Lifetime Learning Credit], borrower defense to repayment, closed school discharge and aspects of PSLF could be done through budget reconciliation,” Kantrowitz mentioned.Read extra: My Monthly Student Loan Payment Could Jump From $0 to $488. Here’s How I’m Making readyWhat occurs to scholar loans if the Department of Education is eradicated?Few specialists anticipate the Department of Education to be wholly eradicated. Even whether it is, lots of its applications, together with federal scholar loans, would doubtless stay in some type and transfer to completely different departments.”Some have argued that this responsibility should fall under the Treasury, given that federal student loans are funded by the Treasury,” Elaine Rubin, a scholar mortgage coverage professional and director of communications for Edvisors, mentioned in an electronic mail.But any shifts would take time and will trigger disruptions for tens of millions of debtors attempting to use for or repay scholar loans. “Treasury lacks experience with higher education rules, so there may be some chaos,” Kantrowitz mentioned.Wherever scholar loans find yourself, present debtors ought to anticipate the identical phrases that agreed to after they accepted the mortgage.”If the student loans were transferred to another federal agency, the interest rates and terms of the loans would not change. Those terms are specified in the Master Promissory Note and in the law,” Kantrowitz mentioned.Read extra: Student Loan Borrowers Can’t Afford to Wait Any Longer to Do These 6 IssuesWhat about scholar mortgage forgiveness?President Trump has made it clear he isn’t in favor of broad scholar mortgage forgiveness applications, calling the Biden administration’s scholar mortgage aid efforts “a total catastrophe” throughout a presidential debate final yr.However, throughout her affirmation listening to for training secretary, McMahon advised senators that the Department of Education would honor the Public Student Loan Forgiveness Program and different scholar mortgage forgiveness applications that have been created by Congress.”If we want stronger or more programs for loan forgiveness, then Congress should pass those programs, and then we would implement it,” she mentioned. Eliminating the division would additionally not have an effect on these debtors whose loans have already been forgiven, in response to Kantrowitz. “The president cannot claw back forgiveness that has already been provided. It is legally binding,” he mentioned. “The courts also say that forgiveness has ‘irreversible’ impact.”The Biden administration’s Saving on a Valuable Education plan, which had lowered month-to-month funds and supplied further forgiveness choices, was struck down by a US appeals courtroom ruling this week. SAVE was already on the chopping block, and the Trump administration is not anticipated to defend the plan. Read extra: You Can’t Be Forced to Repay Forgiven Student Loans – Unless This OccursWhat to do if in case you have scholar loansFor most present debtors, the influence of eliminating the division may not be instantly obvious. “Most functions are implemented through contractors, so student loan borrowers are unlikely to notice anything different,” Kantrowitz mentioned.For now, debtors who maintain scholar loans ought to keep tuned for updates and put together to restart funds if they have been on pause. Make positive you understand who your mortgage servicer is and that they’ve your present contact data. If you are at the moment enrolled within the SAVE compensation plan, anticipate to pay extra this yr. You can use the Department of Education’s mortgage simulator to calculate your new fee, and get thinking about different IDR choices and saving methods.If you are enrolled in PSLF and are close to the 120-payment mark, it’s possible you’ll need to contemplate making use of for the PSLF buyback program. It means that you can “buy back” no-payment months not counted towards forgiveness whereas your loans have been in forbearance or deferment. Although the PSLF program should be protected, the buyback program may go away so now’s the time to take benefit.
More