Doubts that whatever remains of department can govern student debt as one in four US adults under 40 has loans
Donald Trump ordered the dismantling of the US Department of Education on Thursday, prompting uncertainty for those holding student debt and questions about what happens next.
Trump’s press secretary told reporters earlier on Thursday what remained of the department would continue to govern student debt.
“The Department of Education will be much smaller than it is today,” Karoline Leavitt said. “When it comes to student loans and Pell grants those will still be run out of the Department of Education … any critical functions of the department will remain.”
Her words echoed those of the department itself, which has said, while announcing a 50% staff cut earlier this month, it will “continue to deliver on all statutory programs that fall under the agency’s purview, including formula funding, student loans, Pell Grants, funding for special needs students, and competitive grant-making”.
In January, as the Biden administration ended, the education department said it had approved a total of $188.8bn in student loan forgiveness, affecting 5.3 million borrowers.
But according to Pew Research, one in four US adults under 40 (or more than 40 million adults) has student debt. The same source says median debt runs between $20,000 and $24,999, with median postgraduate debt about double those figures. Younger graduates, between 25 and 39, are more likely to say they are struggling financially than older graduates, though graduates still report higher income than those who do not complete college.
Many observers doubt that whatever remains of the Department of Education will be properly equipped to manage student debt.
In a statement to the Guardian on Thursday, Sameer Gadkaree, the CEO of the Institute for College Access and Success, said: “Shuttering the Department of Education would prove disastrous for students, borrowers, and our nation’s future workforce.
