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On March 21, Donald Trump signed an executive order to dismantle the U.S. Department of Education, criticizing it for “breath-taking failures” and accusing it of indoctrinating students with political, racial, and sexual material. The department, established in 1979, has overseen student loans and programs for low-income students. Trump’s move to defund the department and return control to individual states has left many Americans concerned about the fate of their student loans. While some hoped their debt might be forgiven, Trump made it clear that erasing the $1.6 trillion federal student loan portfolio was not his goal.

White House Press Secretary Karoline Leavitt clarified that key functions, such as federal student loans and Pell grants, would continue under a minimized education department. However, Trump has suggested that student loans should no longer be managed by the Education Department. He proposed shifting these responsibilities to other agencies, such as the Treasury Department, Commerce Department, or Small Business Administration, with experts pointing to the Treasury Department as the most likely alternative, given its role in collecting debt. Over 40 million Americans are affected by student loans, and no forgiveness has been promised under this new plan.