Promises kept.
The Trump Administration just made its clearest move yet toward dismantling the Department of Education — shifting its largest financial operation out of the agency.
In a newly announced interagency agreement, the Department of Education will transfer major student loan responsibilities to the Treasury Department, which will now handle collections on defaulted federal loans and support repayment operations.
Officials say it’s not a one-off — it’s the blueprint.
“I think we’ve been very clear about this… that this is a multiphase process,” Undersecretary Nicholas Kent said.
The move targets the single biggest piece of the department’s portfolio: the federal student loan system, which totals nearly $1.7 trillion.
Policy analysts say that’s no small tweak.
Andrew Gillen of the Cato Institute called it the most consequential shift yet, noting earlier agreements were “relatively small” by comparison.
“This student loan move… this is the biggest staffing and the biggest budgetary component of the Department of Education,” Gillen said.
Kent didn’t disagree.
“Characterizing it as the next and largest step toward winding down the Department of Education is absolutely the right way to think about it,” he said.
The administration has been laying the groundwork for months.
During the 2024 campaign, Donald Trump pledged to eliminate the department entirely. Since taking office, he has directed agencies to begin redistributing their responsibilities across the federal government.
The strategy is simple: prove the department isn’t necessary.
“The Secretary has been on the record saying that these interagency agreements are proof of concept… that the Department of Education does not need to be here,” Kent said.
Education Secretary Linda McMahon framed the shift as a push for efficiency and local control.
“Cutting through layers of red tape in Washington is one essential piece of our final mission,” she said, adding that the administration is working with states and Congress to lock in reforms.
Officials also argue the change is about fixing what they call Biden-era mismanagement of the student loan system.
According to the department, fewer than 40% of borrowers are on repayment plans, while nearly a quarter are already in default.
The Treasury handoff, they say, will streamline collections and reduce taxpayer losses.
“This will benefit students… and save taxpayers money,” Gillen said.
Hannity Highlights
The Trump administration is shifting federal student loan operations to the Treasury — the largest transfer yet.
Officials say the move is part of a broader plan to dismantle the Department of Education entirely.
The student loan system, worth nearly $1.7 trillion, is the department’s biggest responsibility.
The strategy aims to prove federal education functions can continue without a standalone department.
Behind the scenes, the restructuring is already well underway.
Kent said the department has shrunk by more than 40%, entered into 10 interagency agreements, and reassigned staff across the federal government.
“In over a year, we have reduced the size of the department by over 40%,” he said.
The end goal is explicit.
“We want to continue to work with Congress… with the ultimate goal of closing down the department and putting ourselves out of a job.”
OVERHAUL UNDERWAY: The Trump administration is moving student loan operations to the Treasury in line with its 2024 pledge to dismantle the Department of Education.
"We want to show moms and dads and families that the Department of Education does not need to be here,"… pic.twitter.com/N5e3CId4Gw
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