What the Possible Dismantling of the Department of Education Could Mean for Students and Borrowers

The future of education in the United States may soon undergo one of its most dramatic transformations in decades. Former President Donald Trump, along with Elon Musk’s Department of Government Efficiency (DOGE) team, has initiated efforts to dismantle the U.S. Department of Education. This agency has long played a central role in overseeing student loans, school funding, and higher education access. The proposal has sparked intense debate, with significant consequences for students, educators, and borrowers already beginning to unfold.

A Push to Reshape Federal Education Oversight

Established in 1979 under President Jimmy Carter, the Department of Education has faced criticism from some lawmakers for years. Former President Ronald Reagan once advocated for its removal, arguing that education policy should be handled by individual states. Now, Donald Trump has made eliminating the department a centerpiece of his 2024 campaign. He appointed former Small Business Administration Administrator Linda McMahon as education secretary, instructing her to gradually reduce the department’s influence.

Elon Musk has also become an unexpected figure in this initiative. His team at DOGE has aggressively pushed for budget cuts, particularly within the department’s research divisions. Former U.S. Under Secretary of Education James Kvaal warned that these reductions could have serious consequences, stating, “Without data, we lose the ability to track educational success, student debt trends, and funding disparities.”

Public Reactions and Policy Debate

Public opinion on dismantling the Department of Education remains divided. A Data for Progress survey found that 61% of likely voters oppose the idea, while 34% support it. Despite this, the administration argues that shifting control to state and local governments will enhance efficiency and responsiveness.

Tomas Philipson, a former White House economic advisor, supports decentralized education policy, arguing that local governments are better equipped to understand and address their own educational challenges. However, many education advocates question whether some states will have the necessary resources to sustain school funding without federal support.

Concerns Over Student Loans

One of the key concerns surrounding the department’s potential dissolution is the fate of federal student loans. The Department of Education currently manages over $1.6 trillion in student debt. If dismantled, oversight of these loans may shift to the U.S. Treasury, a transition that financial and education experts warn could be highly disruptive.

Karen McCarthy, Vice President at the National Association of Student Financial Aid Administrators, voiced apprehensions about such a move, cautioning that “the Treasury is not built to support students—it focuses on collecting debt, not providing aid.” Many fear that this shift could result in stricter repayment terms, reduced borrower protections, and heightened bureaucratic challenges for students repaying loans.

Budget Cuts and Their Impact

Budget reductions within the Education Department have already begun. The Institute of Education Sciences, which gathers critical education research and data, has been significantly downsized by DOGE. Additionally, 169 federal contracts have been canceled, halting data collection on student loan performance, repayment rates, and funding disparities.

Brett House, a professor at Columbia Business School, warned of the long-term impact of these cuts. “Without federal oversight and data collection, we risk losing insight into education policies that affect millions. This isn’t just about statistics—it’s about real students, real debt, and real opportunities.”

What’s Next for Students and Borrowers?

For the 42 million Americans currently repaying student loans, uncertainty looms. A transition in loan management could bring new repayment structures, reduced forgiveness options, and administrative confusion. Additionally, with decreases in education research funding, policymakers could struggle to make informed decisions about student aid and financial assistance.

Although fully dismantling the department requires congressional approval, the administration appears determined to scale back its influence through funding reductions and by shifting responsibilities to other agencies. The outcome of these efforts remains uncertain, but they have the potential to reshape the landscape of American education for years to come. Students, educators, and borrowers alike will need to stay informed and prepared for the significant changes that could lie ahead.