The Department of Education Cut Its Workforce In Half. How That Will Affect Your Student Loans?

As part of the White House’s plan to gut the Department of Education, the agency cut half of its workforce this week—which could affect how it administers its student loan programs.

The department said Tuesday it would cut its 4,133-person workforce to roughly 2,183. Almost 30% of the reduction was due to employees who took a buyout option. The reduction impacted all divisions, but the Department of Education did not say exactly how many people were let go within each division.

However, hundreds of workers in the Federal Student Aid office were among those laid off, NPR reported Wednesday. Fewer workers in the department that administers financial aid programs could make it harder to enforce student loan programs and help borrowers, said Katharine Meyer, a fellow in governance study at the Brookings Institute, a nonpartisan research organization.

“I think one of the biggest threats to the department being able to deliver its services is having enough staff to administer those programs, to administer its watchdog functions,” Meyer said. “To directly be able to inform students questions, whether it’s applying for financial aid or figuring out what loan program is best suited for their situation.”

Is This the Latest Step to Eliminate The Department?

This reduction in force is likely the latest action designed to gut the Department of Education, bringing it one step closer to President Donald Trump’s goal of completely eliminating the department. Although the Department cannot be eliminated without an act from Congress, the Trump administration can still whittle down the workforce.

The Federal Student Aid office, which Congress placed in the Department of Education, manages over $1.6 trillion in student loan debt for over 42.7 million borrowers. It also distributes Pell Grants and manages Public Service Loan Forgiveness, all programs created by Congress.

The elimination of the Department of Education would not mean the cancellation of all loans. Instead, the federal government could try to move the entire Federal Student Aid office or specific programs to other agencies, said Megan Walter, a senior policy analyst with the National Association of Student Financial Aid Administrators. Moving any program or office to another agency would require action from Congress, where Republicans hold a slim majority.

Trump has said he would like to see the management of student loans be given to either the Treasury Department, Commerce, or the Small Business Administration.

“Generally, what it means for borrowers is probably more confusion, more processing delays,” Walter said.