Student Loans and Pell Grants to Persist Despite Education Department Shake-Up

Big changes are coming for the Department of Education, but federal student loans and Pell grants aren’t going anywhere—yet. As President Donald Trump takes steps to downsize and eventually dissolve the department, expert Sarah Parshall Perry from the Heritage Foundation assured that critical programs like Title I school funding, civil rights protections, and financial aid will remain intact for now.

Thursday’s executive order, signed by Trump, marks the beginning of a lengthy process to dismantle the department. Education Secretary Linda McMahon has been tasked with transferring key functions, like Pell Grants and Title I funding, to other federal agencies. Perry described the move as a “labor-intensive process” but emphasized the administration’s commitment to ensuring continuity in enforcing civil rights and providing financial aid during the transition.

Under the reshuffling plan, civil rights enforcement could shift to the Department of Justice, while student loan management may find a new home in the Department of the Treasury. Perry noted the administration’s understanding that congressional action is essential for redistributing the department’s responsibilities, a process that will take time and collaboration.

Despite concerns, Perry dispelled misconceptions about school closures or tax hikes due to budget shortfalls. She pointed out that federal funding makes up less than 10% of per-pupil education spending, with the majority covered by state and local taxpayers.

Since its inception in 1979, the Department of Education’s budget has ballooned from $14 billion to a staggering $268 billion in Fiscal Year 2024, reflecting its significant role in federal spending. However, Perry suggested that the department’s role in administering programs could be reduced or transferred to other agencies, aligning with Trump’s goal of restoring local control of education.

The executive order also continues Trump’s broader agenda of scaling back diversity, equity, and inclusion initiatives, focusing on strengthening education at state and local levels while maintaining federal oversight of student loans and civil rights protections. Perry called for a balanced approach, ensuring that federal responsibilities like Title I funding for disadvantaged students remain a priority even as the department’s footprint shrinks.

This shake-up fulfills a major campaign promise from Trump, who has long championed school choice and local control as part of the broader cultural and political battle over education in America.