April 1, 2025, 5:24 p.m.
As the Trump administration begins to shutter the Education Department, experts are expressing doubts over how its core programs will continue to function.
President Trump signed an executive order last month to begin mothballing the Education Department. But his administration said the core programs of student loans, Pell grants, special education, and civil-rights enforcement would continue in some form. Prior to the executive order, the department had already cut its staff by nearly half.
“We don’t have a clear sense of what they will be or when they will be, but we know that things are going to break down,” said Michelle Dimino, director of the education program at Third Way, a center-left think tank.
When Trump signed the executive order last month, he said his goal was to “return our students to the states.”
But the Education Department has no control over states’ school curricula, and the majority of funding for K-12 schools—nearly nine of every 10 dollars—already comes from state and local governments.
Any funding cuts would seem to disproportionately hurt Trump’s base. For the 2020-21 school year, South Dakota had the largest percentage of revenue from federal sources, at 20 percent, according to the National Center for Education Statistics. New York, New Jersey, and Connecticut each only received 5 percent of their revenue from federal sources.
Red states tend to rely more on federal education funding because they tend to receive more Title I funding, said Thomas Toch, director of FutureEd, an independent think tank at Georgetown University’s McCourt School of Public Policy.
Most federal funding comes through Title I, an $18 billion fund that supports schools with a high proportion of low-income students who qualify for free- or reduced-lunch programs. Schools also receive federal funding through the Individuals with Disabilities Education Act, which directs more than $15 billion to support students with disabilities. Trump said both Title I and funding for disabled students are “core necessities” and will remain within the department.
But staff cuts across the department may impact its ability to disburse funds to states.
“When you are down that many staff and that significant of a proportion of your employees and their expertise, there’s definitely going to be things that go wrong,” Dimino said. “You’re left in the position of scrambling to figure out who knows this, who do we need to bring back, or who do we need to try to plug in to make those things right.”
As many states enter budgeting season, changes to the Education Department may make school funding uncertain. Here are key areas to watch:
Research
The Trump administration is likely to shutter the Institute of Education Sciences, which houses the National Assessment of Educational Progress, better known as the nation’s report card. Trump cited the most recent NAEP report in the executive order which guts the program.
“You can’t understand whether the system is becoming more efficient or not if you can’t measure how it’s doing, much less being able to improve schools,” Toch said.
“If you cut the best information source in the country on school quality and educational performance, you are not helping families exercise school choice effectively,” he added. “And therefore, you’re working counter to your commitment to school choice.
“There’s nothing wrong with a thorough-going reevaluation, but you need to be selective.”
Civil rights
It’s likely the Justice Department will pick up some of the slack as the Office for Civil Rights sees heavy staff cuts. The Wall Street Journal reported that the administration shut down seven of OCR’s 12 regional offices. OCR has been instrumental in addressing disputes surrounding racial segregation and educational opportunities in public schools.
Historically, the Justice Department has been the last resort for civil rights disputes in the education sphere, said Jon Fansmith, senior vice president for government relations and national engagement at the American Council on Education. The Education Department prioritizes resolution of civil rights complaints over litigation of those complaints.
When a student complains, the Education Department will investigate the school and issue a recommendation—for instance, improving training or changing a school policy. In extreme cases, when the department issues a recommendation so severe that the school won’t adopt it, the case is referred to the Justice Department, which seeks civil or criminal penalties.
“They essentially prosecute them and deny them federal funding, at which point there’s a series of processes that kick into effect that of course also can be challenged by a court,” Fansmith said.
Moving Office for Civil Rights responsibilities to the DOJ would create a more adversarial process wherein institutions have no incentive to collaborate—they are more likely to act as defendants in a legal proceeding.
Student loans
Trump said last month after the signing of the executive order that the Small Business Administration will absorb the Education Department’s student-loan portfolio. It would require an act of Congress, however, to shift the portfolio away from the Education Department.
“The President has always said Congress has a role to play in this effort, and we expect them to help the President deliver,” White House press secretary Karoline Leavitt said in a statement.
The portfolio, which consists of about $1.6 trillion in loans for roughly 43 million borrowers, is larger than all but three U.S. banks. It is currently housed under the office of Federal Student Aid.
The proposed move also comes at a time when SBA is cutting more than 40 percent of its workforce.
“There’s a certain irony in pointing out how few employees were administering the student loans while at the same time shrinking the staff and moving it to a smaller agency that you’ve just also shrunk the staff at, and saying this will somehow produce better service,” Fansmith said. “The Department of Education has been doing this for decades.”
SBA has little expertise issuing and managing loans, and no experience managing student loans, he said.
Much of student-loan processing takes place between the Education Department and each higher-education institution. Regardless of where the student-loan portfolio lands, experts say borrowers could see errors or delays in their loan processing as a result of staff cuts.
“It’s unclear whether students and their families are going to be well served by an already struggling loan administration,” Toch said.
Delays in distributing the Free Application for Federal Student Aid or Pell Grants might deter students from enrolling in universities, which could affect the finances of colleges and universities.
“It’s really hard to foresee anything other than a disaster,” Fansmith said.
