Donald Trump shifts student loans to Small Business Administration after ordering Department of Education shutdown

S President Donald Trump announced on Friday (March 21) that the Department of Education (DOE) will begin winding down operations, with its key responsibilities being reassigned to the Small Business Administration (SBA) and the Department of Health and Human Services (HHS).

Student loans transferred to Small Business Administration

Trump revealed that the SBA, led by Kelly Loeffler, will take over the Department of Education’s $1.6 trillion student loan portfolio.

“I’ve decided that the SBA, the Small Business Administration headed by Kelly Loeffler, terrific person, will handle all of the student loan portfolio,” Trump told reporters in the Oval Office.

The transition will happen “immediately,” he said, adding, “They are all set for it, they are waiting for it. It'll be serviced much better than it has in the past.”

In 2024, the United States had $1.777 trillion in student loan debt, owed by 42.7 million borrowers, according to the Education Data Initiative.

HHS to oversee special needs and nutrition programs

Trump also stated that HHS, led by Robert F. Kennedy Jr., will take over certain education-related responsibilities, including funding for special needs students and school nutrition programs.

“HHS will be in charge of [funding for] special needs [students] and all the nutrition programs and everything else,” the president said.

White House moves to dismantle DOE

On Thursday (March 20), Trump ordered his administration to begin dismantling the Department of Education, aiming to fulfill a major campaign promise. However, the White House acknowledged that fully dissolving the agency would require congressional approval.

Education Secretary Linda McMahon has been directed to take all necessary legal measures to shut down the department, short of completely dismantling it.

“After 45 years, the United States spends more money on education by far than any other country, and spends, likewise by far, more money per pupil than any country, and it’s not even close, but yet we rank near the bottom of the list in terms of success,” Trump said Thursday.

The president added that many of the department’s responsibilities will be returned “back to the states.”

SBA announces major workforce cuts

Shortly before Trump’s announcement, the SBA revealed in a news release that it would cut its workforce by 43%, eliminating approximately 2,700 positions from its 6,500-employee workforce.