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People are asking the same question about student loans after Trump defunds Department of Education

Home> News> Politics

Published 14:37 21 Mar 2025 GMT

People are asking the same question about student loans after Trump defunds Department of Education

Trump has signed an executive order to dismantle the US education department

Mia Williams

Mia Williams

Donald Trump has, today (21 March), signed an executive order to dismantle the US education department - but what does that mean for one in four Americans with a student loan?

Trump, who has accused the Department of Education of 'breath-taking failures', has now vowed to defund it, returning the money it controls to individual states.

He claimed that the department had been indoctrinating young people with racial, sexual, and political material.

Addressing the White House, he said: "We're going to shut it down as quickly as possible."

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It was firstly established in 1979, to oversee student loans and also run programmes to help low-income students.

Trump signed the executive order surrounded by school children. (Chip Somodevilla/Getty Images)
Trump signed the executive order surrounded by school children. (Chip Somodevilla/Getty Images)

But many Americans are now wondering what will happen to their student debt, now the department is gone.

Some were hopeful that their debt was automatically cleared, but letting the $1.6 trillion federal student loan portfolio go, was definitely not on Trump's list of to-do's.

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One user on X said: "Remember folks: You don’t owe student loans to a department that doesn’t exist anymore.

"Enjoy your student loans forgiveness. The department of education is gone, so don’t send them a thing."

Another questioned: "What Happens to student loans if the education dept. Closes? The White House released an executive order instructing the secretary of education to begin shutting down the department."

Earlier this month, the department laid off half of all its staff.

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The president has suggested student loans will be transferred to another department. (Chip Somodevilla/Getty Images)
The president has suggested student loans will be transferred to another department. (Chip Somodevilla/Getty Images)

More than 40 million Americans have a student loan, and it seems as though there is no forgiveness with Trump.

Karoline Leavitt, the White House press secretary, clarified this issue.

She told reporters that she expected some key functions of the education department, which includes federal student loans, to remain at the minimised agency.

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Leavitt said: "When it comes to student loans and Pell grants those will still be run out of the department of education…any critical functions of the department will remain."

But Trump admitted earlier this month that he doesn't think it should come under the department's remit.

Speaking earlier this month, the president said: "I don’t think the education department should be handling the loans. That’s not their business.”

Trump expressed that he was seeking to pass over the responsibilities to the Treasury Department, Commerce Department or the Small Business Administration.

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Experts have claimed that the Treasury Department would be the most logical alternative, as it already plays a role in collecting debt from Americans.

Featured Image Credit: Jabin Botsford/The Washington Post via Getty Image

Topics: Donald Trump, Politics, US News

Mia Williams
Mia Williams

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