Trump Administration Considers Student Loan Management Shift
The Trump administration is reportedly looking into the possibility of transferring the management of the federal student loan program from the U.S. Department of Education to the Small Business Administration (SBA).
Administration officials mentioned on Thursday that this change could be part of President Donald Trump’s broader efforts to reduce the Education Department’s influence within the government.
If approved, this proposal would hand over responsibility for the student loan system—serving over 40 million Americans—to an agency primarily focused on supporting small businesses through various financial services.
Previously, President Trump had expressed interest in relocating oversight of federal student loans away from the Education Department, which currently handles loan repayments, various repayment programs, and loan forgiveness.
In March, Trump commented to reporters, “I don’t think education is right.” He noted that processing loans isn’t the Department’s primary role, suggesting that the SBA could be a better fit for this duty.
He even mentioned that SBA Administrator Kelly Loeffler was supportive of the idea.
Currently, officials are weighing how existing contracts with loan servicers might change if this transfer takes place. Reports suggest some officials have raised doubts about the SBA’s readiness, arguing that it may lack the necessary staff, technology, and expertise to handle the nation’s significant $1.6 trillion student loan portfolio effectively.
Michael Negron, a former advisor to the SBA, remarked, “The SBA has years of experience and relationships with small business lending. Any deviation from that will only increase risk, not only for the federal government but also for the borrower.”
Looking ahead, the White House is pursuing aggressive agency modernization efforts aimed at cutting down bureaucratic redundancy, protecting taxpayer dollars, and enhancing the experience for American families.
To achieve these goals, the administration plans a structured transition to shift operational management of the $1.7 trillion federal student loan portfolio to the Department of the Treasury, making use of its strong financial infrastructure and operational know-how.
