Trump Proposes Major Overhaul of Federal Student Loan Office: What It Means for Borrowers

President Trump recently shared his thoughts on the federal government’s vast student loan system, which totals nearly $2 trillion. He believes that the Education Department should not manage this huge portfolio, saying, “That’s not their business.”

During a press conference, Trump revealed he is considering moving the Federal Student Aid office, which aids millions of borrowers, to another part of the government. He suggested that it might fit better under the Small Business Administration (SBA), a department that provides financial help to entrepreneurs. Trump noted that Kelly Loeffler, the current SBA leader, is interested in taking on this responsibility.

Shifting the office is not straightforward. Any change would need approval from Congress, and getting bipartisan support in the Senate can be tough. Trump acknowledged that moving the Federal Student Aid office is “the most complicated thing” to execute.

His comments come at a time when the future of the Education Department is uncertain. A White House official mentioned that Trump is still thinking about a potential executive order to restructure the agency. A draft of this order suggests closing down parts of the Education Department as much as legally possible, but it remains unclear if the administration will proceed with it.

Interestingly, the Federal Student Aid office has seen a drop in staff recently. Approximately 10% of its employees accepted buyout offers, and the Education Department also offered financial incentives for more workers to retire or leave. This has raised concerns among college financial aid officers about the impact of such changes on an already complex system.

The idea to move Federal Student Aid is part of a broader conservative policy plan. Some experts caution that merging significant bureaucracies is never a simple task, comparing it to major banks attempting to merge quickly. The implications of this move could affect countless students relying on aid.

As discussions continue, the focus remains on how these proposed changes could reshape the landscape of student loans and educational support in America.

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