What Happens to Student Loans if the Department of Education Shuts Down?

Since taking office, President Donald Trump has proposed to shut down the United States Department of Education and hand over control of educational matters to individual states. 

This idea was a major part of his campaign and continues to be a key focus in his administration plans through 2025.
 

Why Closing the Department of Education Matters

The thought of closing the Department of Education has upset many. 

Critics argue it could lead to unequal educational opportunities across different parts of the country and complicate current educational supports.
 

Potential Impacts on the Education System

Student Loans:

If President Trump's plans go ahead, there could be delays in the financial aid process. Already, issues with the Free Application for Federal Student Aid (FAFSA) have led to fewer applications, which are vital for accessing programs like the Pell Grant. 

In previous years, around 72% of students received some form of aid, and 40% benefited from Pell Grants. Delays could mean fewer students can afford to go to college.

Loan Repayment:

Changes to the Department of Education could also make it harder to repay student loans. Although loans would still need to be repaid, alterations to income-based repayments and debt forgiveness could occur. 

These changes would need Congress approval, and experts fear this could complicate the repayment process even more.

Public Schools:

Schools primarily get funding from local sources, with the federal government contributing about 13.6% in 2021-2022. 

Reducing federal support could hit poorer states hard, possibly resulting in bigger class sizes, reduced special education services, and less protection for students.
 

States' Reaction

The possibility of losing federal funding has caused significant concern among educators and politicians. Senator Mary Kunesh expressed worry about being cut off from crucial federal funds. 

Meanwhile, some local Republicans urge caution, suggesting that it's too early for panic since it’s not yet confirmed what changes President Trump will implement, if any.

The ongoing debate highlights the significant anxiety surrounding the future of education funding and administration in the U.S.

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