President Donald Trump said Friday that he wants to move control and oversight of the federal student loan portfolio.
The brief announcement came a day after Trump signed an executive order to dismantle the Department of Education — and a day after his spokeswoman said she did not expect changes to student loans and special education services.
Trump said Friday that student loans will be handled by the Small Business Administration, and “it will be serviced much better than it has in the past.” He also said programs involving students with disabilities would be shifted to the Department of Health and Human Services.
No details were available Friday about what that means for individual borrowers.
Will current borrowers see their loans transferred? It’s too early to say, but experts say to always keep records of payments and balances.
If the Education Department does actually close, another federal department could become the lender for new loans.
Congress could try to alter popular financial aid programs, such as Pell grants or Public Student Loan Forgiveness, but right now, all current laws and funding remain in effect — just with fewer federal workers to address any issues.
The Education Department manages $1.7 trillion in student debt, portions of which are mired in legal issues.
It also just cut large swathes of its staff, including from the Federal Student Aid Office.
“This can only result in borrowers experiencing erratic and inconsistent management of their federal student loans,” Jessica Thompson, senior vice president of the Institute of College Access and Success, told The Associated Press. “Errors will prove costly to borrowers and ultimately, to taxpayers.”
Sen. Patty Murray, a Democrat from Washington State, called Trump’s transfer of studet loans “a clear violation” of law on social media.
Linda McMahon has said she also plans to shift the assignment of federal money to support at-risk students, such as students with disabilities.
On Friday, House Democrats introduced a resolution requesting Trump and McMahon turn over records related to the shutdown attempt.