What does the U.S. Department of Education do and what would happen if it were to be abolished?

As discussions about the potential abolition of the U.S. Department of Education resurface in political discourse, we aim to provide clarity on what this could mean for students, educators, and institutions across the nation.

What Does the U.S. Department of Education Do?

The U.S. Department of Education fundamentally ensures educational quality and equity. Among its key functions, the Department:

Administers federal student aid programs, including Pell Grants and student loans.
Enforces civil rights laws in education, such as Title IX and the Individuals with Disabilities Education Act (IDEA).
Funds programs for low-income schools (Title I) and special education initiatives.
Collects and analyzes education data to help guide policy decisions.
Supports career and technical education to prepare students for the workforce.

What Happens If the Department of Education Is Abolished?

Should the Department be dismantled, its responsibilities would likely be transferred to individual states, local governments, or other federal agencies. This could lead to significant changes, such as:

Funding Uncertainty: Federal grants and student loan programs could be restructured, potentially impacting millions of students.
State Control: More power would shift to state governments, which could lead to disparities in education quality across the country.
Weakened Civil Rights Protections: Without a central body to enforce laws like Title IX, protections against discrimination might become inconsistent.
Changes in Data Collection and Standards: The absence of federal oversight could make it harder to track national progress in education.

What Happens With Student Loans if Abolishment Were to Take Place?

If the U.S. Department of Education were abolished, federal student loans would not simply disappear, but the management, servicing, and repayment structure could change. Here’s what could happen to borrowers with existing federal student loans:

1. Loans Would Likely Be Transferred to Another Federal Agency

The Department of the Treasury or another government entity could take over the administration of federal student loans.
Loan servicing companies (such as MOHELA, Nelnet, and Aidvantage) might continue to manage repayment but under a different federal oversight structure.

2. Repayment Plans Could Be Restructured

Income-driven repayment (IDR) plans such as PAYE, REPAYE, and IBR might change, as these programs rely on federal policy.
Loan forgiveness programs like Public Service Loan Forgiveness (PSLF) could be altered, phased out, or transferred to another agency.
Borrowers already enrolled in these programs might be grandfathered in, meaning existing agreements would be honored, but new enrollments could be limited or stopped.

3. Interest Rates and Loan Terms Might Change

Without federal oversight, interest rates on new loans could be set by private lenders or state governments rather than the Department of Education.
Borrowers could lose protections like fixed interest rates and repayment pauses during economic crises.

4. Private Lenders Could Play a Larger Role

Some policymakers advocate for a return to bank-based lending, where private lenders issue student loans with federal backing.
This could mean fewer borrower protections and higher interest rates for new students taking out loans.

5. Current Loans Would Still Be Owed

Abolishing the Department of Education would not eliminate debt—borrowers would still be responsible for repayment.
Loan collections, deferment, and forbearance rules could change depending on how the transition is handled.

6. Federal Grant Programs Could Be Affected

Pell Grants and Work-Study programs could face changes or be transferred to a different agency.
If federal education funding is reduced, fewer students may qualify for grants and financial aid.

No Need to Panic – Policy Shifts Take Time

While President Donald Trump has expressed a desire to abolish the Department of Education, it’s important to note that many of his previous executive orders related to education have been rescinded or reversed. Policy changes of this magnitude require congressional approval, making it a complex and lengthy process.

At Education Advisor, we remain committed to supporting students, educators, and institutions through any policy changes. Our education technology solutions continue to provide valuable resources to help students navigate their educational and career paths with confidence.