Trump says Education Dept. shouldn’t handle student loans as it’s ‘not their business’ and proposes shifting them to Treasury – The Times of India
President Donald Trump recently criticized the US Department of Education’s role in managing federal student loans, calling it “not their business.” In comments made earlier this month, Trump reiterated his belief that the Education Department should not oversee the loans of more than 40 million Americans. His administration, he suggested, would be exploring alternatives, including the transfer of responsibility to agencies like the Treasury Department, Commerce Department, or the Small Business Administration (SBA).
Trump’s comments highlight a key part of his broader push to dismantle or reconfigure the Education Department, which has long been responsible for overseeing student loans. The department currently manages federal loans, servicing accounts for millions of borrowers across the country. According to CNBC, Trump said, “I don’t think the Education [Department] should be handling the loans. That’s not their business.”
Potential shift in loan management
In the wake of these comments, experts and policymakers are grappling with the potential implications of such a shift. While Trump’s administration cannot dissolve the Education Department outright without congressional approval, it could redistribute some of its responsibilities. As reported by CNBC, Trump indicated that federal student loan management could be moved to the Treasury, Commerce, or SBA—agencies that are already involved in aspects of economic oversight.
Among the agencies mentioned, the Treasury Department seems the most logical candidate to take on the student loan responsibility, experts have noted. Treasury already handles some debt collections through the Treasury Offset Program, making it a familiar player in the realm of financial management. However, both the Commerce Department and SBA have little to no experience with student loans, raising questions about how well they could handle such a large and complex system.
Impact on student loan borrowers
For the 40 million federal student loan borrowers in the US, the potential transfer of their loan management could lead to significant disruptions. According to CNBC, experts caution that such a move could cause chaos, especially in light of existing challenges borrowers already face. Many federal student loan borrowers complain about inaccurate billing, difficulty reaching servicers, and problems with accessing loan forgiveness programs.
Michele Shepard Zampini, senior director of college affordability at The Institute for College Access and Success, warned that moving the loans to another agency could cause further complications. “Borrowers and students need more stability, and this would create chaos,” she said, as quoted by CNBC. With potential delays in processing loan forgiveness and other repayment plans, millions of borrowers could experience additional financial uncertainty.
While the terms and conditions of loans may not change with a shift in oversight, the overall disruption could be significant for borrowers already facing difficulties within the current system.
