President Donald Trump announced a sweeping reorganization of federal education programs on Friday, declaring that the Small Business Administration (SBA) will now handle the federal student loan portfolio, while programs for students with disabilities will be transferred to the Department of Health and Human Services (HHS). The move is part of Trump’s broader push to dismantle the Department of Education, a long-standing conservative goal.
“I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, will handle all of the student loan portfolio,” Trump told reporters in the Oval Office. “It’s a pretty complicated deal, and that’s coming out of the Department of Education immediately.”
At the same time, Trump stated that HHS, under Secretary Robert F. Kennedy Jr., will take control of special education and nutrition programs. “Bobby Kennedy, with the Health and Human Services Department, will be handling special needs and all the nutrition programs and everything else,” he said.
A Major Shake-Up for Federal Education Programs
The announcement follows an executive order signed by Trump on Thursday directing Education Secretary Linda McMahon to begin dismantling the Education Department to the fullest extent legally possible. While Congress would have to approve the department’s complete elimination, the Trump administration has indicated it will shut down any programs not explicitly mandated by law and reassign others to different agencies.
The decision to transfer student loans to the SBA coincides with a 40% reduction in that agency’s workforce, raising concerns about its ability to manage a portfolio of roughly 43 million borrowers with a combined $1.6 trillion in student debt. Historically, the Department of Education’s Office of Federal Student Aid has managed student loans, though Trump argued that the department is “not a bank” and that such functions belong in an agency “equipped to serve America’s students.”
“As the government’s largest guarantor of business loans, the SBA stands ready to deploy its resources and expertise on behalf of America’s taxpayers and students,” SBA Administrator Kelly Loeffler said in a statement.
Criticism and Legal Challenges Likely
Advocates for students with disabilities have strongly opposed transferring special education programs to HHS, particularly under Kennedy, who has long promoted false claims about vaccines and autism. Critics argue that shifting oversight to HHS, an agency with no direct experience in special education, could jeopardize essential services for children with disabilities.
“These programs exist to ensure students with disabilities receive the services they need to succeed in school,” said a spokesperson for the National Center for Learning Disabilities. “HHS is not structured to support these students, and moving these programs could lead to disruptions in care and funding.”
The decision is also expected to face legal challenges. While executive orders can direct federal agencies to reorganize programs, significant changes—such as moving federal student loans to a different department—typically require congressional approval. White House Press Secretary Karoline Leavitt acknowledged this reality, stating, “The President has always said Congress has a role to play in this effort, and we expect them to help the President deliver.”
Education Department on the Chopping Block
The restructuring effort aligns with Trump’s long-standing goal of abolishing the Department of Education, a policy stance dating back to the Reagan administration. The push has gained momentum under McMahon, who recently announced plans to cut 50% of the department’s workforce and eliminate approximately $1 billion in federal grants tied to diversity, equity, and inclusion programs.
“Our job is to respect the will of the American people and the president they elected, who has tasked us with eliminating bureaucratic bloat at the Department of Education,” McMahon said earlier this month. “An effective transfer of educational oversight to the states will mean more autonomy for local communities. Teachers will benefit from less micromanagement, enabling them to get back to basics.”
What’s Next?
With Congress unlikely to approve the full elimination of the Education Department, the Trump administration is expected to continue shifting programs to other agencies in the coming months. Meanwhile, legal challenges could slow or block aspects of the reorganization.
For now, student borrowers and families of children with disabilities are left with uncertainty as federal agencies prepare for a major transition. How the SBA will handle the massive student loan portfolio, and whether HHS is equipped to take on special education programs, remain open questions.
