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Trump Orders Education Department Closure; SBA to Manage Student Loans

President Trump's executive order dismantles the DOE, transfers student loans to the SBA, amid ongoing concerns about education funding and loan management.

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Overview

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President Trump ordered the dismantling of the Department of Education (DOE) and announced that the Small Business Administration (SBA) would take over federal student loans for 40 million borrowers. The executive order has raised concerns about the handling of student loans and potential errors during the transition. Critics warn that access to key education programs may suffer. While the SBA prepares for the transition, Trump also indicated the Health and Human Services Department would assume some responsibilities previously managed by the DOE. Student loan borrowers have received temporary relief from increased payments during the transition.

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Analysis

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  • The Center expresses concern that the proposed cuts to the Department of Education may disproportionately harm low-income and rural schools, which rely heavily on federal funding and support for essential services.
  • Fears arise that significant job losses within the National Center for Education Statistics (NCES) will hinder the allocation of vital resources and data needed to determine eligibility for crucial programs like Title I and REAP.
  • While supporting a return of education authority to state and local governments, the Center emphasizes the need for proper oversight and data management to ensure that funding effectively reaches students who need it most.
  • Protests are emerging against Trump's executive order to shutter the Department of Education, with student demonstrations highlighting the potential loss of critical services and support for vulnerable populations.

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US Small Business Administration to oversee student loans
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FAQ

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Transferring student loans to the SBA could lead to slower processing times and potential administrative errors during the transition. However, the SBA already handles significant loan volumes, which might mitigate some challenges.

President Trump has stated that programs such as Pell Grants and special needs funding will be preserved and transferred to other departments. The Department of Health and Human Services will handle special needs and nutrition programs.

Dismantling the Department of Education and transferring its responsibilities, especially student loans, may face legal opposition since eliminating a federal department requires an act of Congress. The Higher Education Act of 1965 mandates that the Federal Student Aid Office be under the Department of Education.

History

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    4 articles
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    3 articles
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    2 articles
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    6 articles