Will the U.S. Department of Education be disbanded by Trump Administration?
This video examines the historical foundation of the U.S. Department of Education, its mission to promote equal access and accountability in education, and the conservative-driven debate over its future.
- The Trump administration’s proposed cuts to the U.S. Department of Education have raised question by borrowers about the future of student loans and grants.
- The Public Service Loan Forgiveness program faces potential limitations, with President Donald Trump seeking to redefine eligibility criteria.
- Student loan borrowers on the SAVE plan have experienced forbearance, halting interest accrual but also pausing progress toward loan forgiveness.
The Trump administration’s efforts to make major cuts to the U.S. Department of Education has raised questions for many current and future student loan borrowers about what changes will mean for them.
The Education Department awards billions of dollars in loans and grants each year to support students attaining a higher education. In Arizona, that’s around 912,000 people with a total of $32.4 billion in loans.
While federal leaders had promised there would be little to no changes to how student loans and grants are handled, some experts have doubts as fears of layoffs loom.
President Donald Trump told reporters earlier this month that he thinks the Education Department should not be handling loans, saying it’s “not their business.” He said his administration was looking to move the responsibility to the Department of the Treasury or Small Business Administration, but it’s still unclear what that will mean for borrowers.
Rich Nickel, president of advocacy group Education Forward Arizona, said he is concerned about Arizonans’ access to federal funding in the face of Education Department shakeups. While he doesn’t expect the agency to completely disappear, even changes in oversight could make an impact, he said.
“Over the past couple of decades, we have put our Arizona families in a position where they are really reliant upon federal funding to be able to attend our universities and colleges,” Nickel said in reference to diminishing state funding going toward Arizona’s public university system and Arizona Promise Program. The scholarship program covers the remaining cost of tuition and fees for students from low-income backgrounds. The program saw a multimillion-dollar budget cut last year.
What is happening to Public Service Loan Forgiveness?
On March 7, Trump signed an order that could limit a major student loan forgiveness plan that millions of Americans are actively enrolled in.
The Public Service Loan Forgiveness plan has waived more than $1 billion in loans for around 15,300 borrowers in Arizona, but the order could change who is eligible for the forgiveness. “Restoring Public Service Loan Forgiveness” attempts to create new parameters for utilizing the program, arguing that the program has pushed “perverse incentives” and has forgiven loans for people working on nonprofit groups with illegal activity.
The program was created in 2007 through an act of Congress and allowed many Americans in the public service sector to have their loans forgiven after making payments for at least 10 years.
Trump is now asking the newly selected Education Secretary Linda McMahon to make changes to the program, making “improper” nonprofits ineligible. He claimed in the order that taxpayer dollars have gone to activist groups that “fail to serve the public interest,” pointing to groups who have supported transgender youth and been involved in “illegal discrimination.”
Will the SAVE plan continue?
Millions of student loan borrowers have seen student loan payments forgiven or lowered through the Saving on a Valuable Education plan, which was launched during the Biden administration. The future of the plan has become increasingly uncertain amid waves of federal spending cuts.
Without the program, borrowers would see significant upticks in their payments.
Why are my student loans in forbearance?
Current borrowers on the SAVE plan have seen their loans in forbearance for months, as a legal battle launched by attorneys general in largely conservative states ensued. Officials with the Office of Federal Student Aid said it’s expected the loans will stay that way through the fall.
While borrowers in forbearance are not accruing interest, the time also does not count toward loan forgiveness — coming for some after 10 years. Last month, an 8th Circuit ruling said the program was a form of government overreach.
The Trump administration could choose not to defend the SAVE plan further in court.
Reporters Madeleine Parrish and Alexandra Hardle contributed to this report.
Helen Rummel covers higher education for The Arizona Republic. Reach her at hrummel@azcentral.com. Follow her on X, formerly Twitter: @helenrummel.
