Trump Administration Considers Executive Order to Dismantle Education Department

🗝️ Key Points

• The organization manages $1.6 trillion in federal student loans and distributes important funds for low-income areas and students with impairments.Closing the agency would call.
• Already, the government has started to downplay the department's influence by cutting grants and contracts and laying off employees.Though federal dollars provide extra help,.
• The suggested dissolution of the agency might have ramifications for federal student funding, therefore impacting loan servicers and borrowers.

The Trump administration is considering issuing an executive order to eliminate the Department of Education, a move that would require congressional approval, according to a draft order under review.

Publicly traded companies with significant exposure to the student loan industry include SoFi Technologies (SOFI, Financials) and Navient (NAVI, Financials).

The proposal contends that government control of education has failed families, teachers, and kids, therefore rendering it an ineffective “experiment.” The Directive, which may be released as early as Thursday, would instruct Education Secretary Linda McMahon to act within the confines of current legislation closing the agency.

Operating on an annual budget of $102.24 billion, the Department of Education—which employs around 4,500 people last year—accounts for 0.9% of the fiscal year 2025 federal budget. The organization manages $1.6 trillion in federal student loans and distributes important funds for low-income areas and students with impairments.

Closing the agency would call for legislative action, with a Senate majority of 60-votes required. Already, the government has started to downplay the department’s influence by cutting grants and contracts and laying off employees.

Though federal dollars provide extra help, public school financing in the United States mostly originates from state and local governments. The suggested dissolution of the agency might have ramifications for federal student funding, therefore impacting loan servicers and borrowers.

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