U.S. Education Department moves closer to shutdown under Trump administration

The Department of Education announced an interagency agreement Thursday with the Treasury Department to transfer student lending operations. The move shifts responsibility for collecting on defaulted federal student loans to the Treasury, which will also support efforts to bring borrowers back into repayment, according to a department release.

Nicholas Kent, the department’s undersecretary, told Fox News Digital on Monday that this is part of a multi-phase process aimed at reducing the department’s role. The Trump administration has long sought to eliminate the department, with then-candidate Donald Trump promising to shut it down during his 2024 campaign and signing an executive order to begin disbanding it.

Andrew Gillen of the Cato Institute said the shift is significant, noting that previous interagency agreements were smaller. He described this move as the largest staffing and budget change involving the department, indicating a substantial transfer of responsibilities to the Treasury. Kent agreed, calling it the largest step toward winding down the department.

The move follows efforts by the Trump administration to transfer power from various federal offices to other agencies, with the ultimate goal of dissolving the department entirely. Secretary of Education Linda McMahon highlighted the administration’s focus on reducing red tape and empowering local leaders, as well as working with Congress to formalize reforms.

The department stated that moving student loan responsibilities to the Treasury aims to mitigate costs to taxpayers amid what it describes as mismanagement of the federal student loan portfolio. The department estimates nearly $1.7 trillion in student debt, with less than 40% of borrowers on repayment plans and nearly 25% in default.

Gillen told Fox News Digital that the consolidation could streamline processes and save taxpayer money, making it easier to close the department entirely once the transfer is complete. He noted that the department’s budget and staffing needs would diminish significantly, facilitating its shutdown.

Kent also noted that the department has made

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