President Trump said Friday that as part of his effort to radically shrink the Department of Education, he is moving the management of all student loans to the Small Business Administration.
“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, adding that the loan portfolio is a “pretty complicated deal, and that’s coming out of the Department of Education immediately.”
Trump said the restructuring would provide considerable benefits, though he did not explain how the process would play out. “You’re going to have great education, much better than it is now, at half the cost,” he said.
More than 40 million Americans currently hold student loans, totaling more than $1.6 trillion.
Steep staffing cuts: The announcement comes on the same day that the SBA announced that it will reduce staffing levels by more than 40%, eliminating approximately 2,700 positions from a workforce of nearly 6,500.
Trump also announced Friday that the Department of Health and Human Services will take over programs for students with disabilities and nutrition programs currently run by the Department of Education. “Bobby Kennedy, with the Health and Human Services Department, will be handling special needs and all the nutrition programs and everything else,” Trump said. HHS has previously offered buyouts to most of its roughly 80,000 employees.
Recipe for trouble? Critics of the Trump administration’s effort to gut the Department of Education expressed concerns about Trump’s plan to move the student loan portfolio.
Peter Granville, a higher education finance expert at The Century Foundation, a liberal think tank, told CBS News that moving the loans “is not a recipe for efficiency or innovation.” Instead, it’s “a recipe for chaos and frustration for millions of people who rely on the student loan program.”
Jessica Thompson of The Institute for College Access and Success, a nonprofit group focused on education policy, said it “doesn't pass the sniff test” to quickly move “a complex, large student debt portfolio” from one department to another. "We are concerned that there is not a serious, detailed thoughtful plan for reform around what to do with the student loan portfolio,” she told CBS.