The U.S. Department of Education announced that it had begun mass layoffs on Tuesday, reducing staff by about half, raising questions about what this means for student loans.
Newsweek The Education Department has been contacted by email for comment.
Why it matters
The layoffs are the prelude to President Donald Trump’s plan to reduce the size of the federal workforce and remove the Education Department. He swore a pledge to close the department, believing that the authority should be transferred to states and schools.
The agency’s role is primarily finance: it allocates billions of dollars in federal funds to schools and universities and manages the federal student loan portfolio. As of January 2024, the department held $1.5 trillion in federal loans for nearly 43 million borrowers, according to the Office of Government Accountability.
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What to know
The Trump administration has cut employees in the department through the acquisition of offers and the termination of probation employees.
The department said in a statement Tuesday that after the cuts, the department will leave about 2,183 workers. When Trump took office in January, the department had a workforce of 4,133.
The department said all of its departments were affected by the cuts and some needed “a major restructuring to better serve students, parents, educators and taxpayers.”
It added that the agency will continue to carry out all programs that fall under its authority, including the management of student loans, the allocation of federal aid and supervision of Pell’s grants.
It is unclear whether the department’s federal student aid office is restructuring loans, repairs and borrower aid.
Some advocates criticized the cuts and questioned that the department’s actions would not be affected by the layoffs.
“We are particularly concerned about how this move threatens college students and student loan borrowers,” Sameer Gadkaree, president of the University’s Visit and Success Institute, in a statement. Newsweek.
“The core functions of the department may experience power outages or interruptions that allow students to work hard to obtain or renew financial aid or campus-based aid. Meanwhile, student loan borrowers will have a hard time getting the benefits provided by current laws. They cannot be sure they will receive reliable, accurate student loan advice.”
Becky Pringle, president of the National Education Association, said that destruction of the department would “make higher education more expensive, which is not possible for middle-class families.”
Educ
Experts told Newsweek If the handling of federal student loans is redistributed elsewhere, such as the Treasury Department, the removal of the department could result in disruptions.
And if the federal government’s role in student loans continues its role, it may increasingly force borrowers to turn to private lenders, which may underbury universities.
There, Century Foundation Fellow Peter Granville analyzed federal and state policies to improve access and affordability for universities: “We have seen important alignment between government actions and those of the 2025 project.” Newsweek.
“The document says the federal government should get rid of the student loan business altogether. This will allow student loans to enter the private market, which is terrible for students from low-income families.”
What are people talking about
Education Minister Linda McMahon statement Tuesday “Effective reduction reflects the Ministry of Education’s commitment to efficiency, accountability and ensures that resources are directed to where most important: for students, parents and teachers.
“I thank the dedicated civil servants for their work and their contribution to the department. This is an important step in restoring the greatness of the American education system.”
Sameer Gadkaree, president of the Institute of Visits and Success, University Newsweek The layoffs are “part of the ongoing, reckless part of the Ministry of Education, built on the rapid dismissal of workers – coupled with unrealistic hope that the government can then find a plan. It opens the door to chaos and chaos in students, borrowers and schools while ignoring real reform opportunities.”
Aissa Canchola Bañez, Director of Policy The Student Borrower Protection Center said in a statement: These civil servants are working to ensure that students and families can pay for the university, protect students and families from predatory for-profit universities, and require service staff to be responsible for pushing millions of dollars in debt to the debt. Today’s announcement made Trump and Secretary McMahon’s president and McMahon care less about making sure that students, borrowers and jobs are constantly ongoing, while their support and systems are all in progress and divide our profession and systems.
Becky Pringer, President of the National Education Association In a statement said: “Donald Trump and Elon Musk’s goal is to destroy the future of the ball to 50 million students in public schools and rural, suburban and urban communities across the United States, paying billionaires’ tax distribution by demolishing public education.
“Communication with the Ministry of Education will soar class sizes, cut work training programs, make higher education more expensive, and middle-class families will not be able to reach, providing special education services to students with disabilities and civil rights protection for gut students.”
Liz Schuler, president of the largest union union association in the United States, is statement Tuesday: “The dismissal of half of its staff to prevent the Department of Education from functioning will jeopardize the resources, programs and protection measures that will jeopardize the opportunities for success of millions of students.
“The Ministry of Education provides important support to educators and school staff, as well as to enable financial aid and student loans for university and trade schools to work families that would otherwise be unaffordable.”
Representative Brendan Boyle, Democrat and Ranking Member of the House Budget Committee, Written on X: “No one voted for it. Millions of people rely on Pell grants, federal student loans and special education funds. The removal of the Department of Education will hurt our children and cause chaos for students, teachers and families across the country.”
What’s next
At McMahon’s confirmation hearing last month, she admitted that only Congress had the right to abolish the Education Department, but said it could be cut and reorganized. Last month, the Trump administration was reportedly weighing the removal of the department using executive orders.
President Donald Trump told reporters in the Oval Office last week that he had discussed plans to process student loans to transfer to the Treasury or the business department, or the Small Business Administration (SBA).
While the future of how to manage student loans is unclear, borrowers are expected to continue paying.
Updated 3/12/25, 9:46 AM ET: Sameer Gadkaree comment has been added.
Updated 3/12/25, 10:06 AM ET: From Aissa Canchola Bañez has been added.