What Happens to Student Loans if the Department of Education Dept Is Eliminated?

In today’s blog post, I answer a question from a reader regarding what happens to their student loans if President-Elect Trump goes through with his promise of eliminating the Department of Education.

Listen to this article.

The U.S. Department of Education

We first need to realize that shutting down the U.S. Department of Education won’t be easy. An Executive Order isn’t going to cut it. To eliminate the Department of Education, Congressional approval is required, and with a very slim majority, that’s not likely to happen. But what about student loans?

Student Loans and President Trump

I believe the SAVE Plan won’t be saved under President Trump. Republicans will likely replace it with something else, such as another income-driven plan. We most likely can forget about zero monthly payments. It’s been no secret that Republicans have objected to student loan forgiveness, even filing endless lawsuits to prevent the Biden administration from doing so.

• These Republican-Led States Oppose Student Loan Forgiveness

This is why I keep repeating that we should be concerned and prepared for the next four years under a Trump presidency because if the monthly payments on student loans increase, as well as our monthly expenses because of the Trump tariffs, then you will get hit hard financially.

• The Truth Behind Trump Tariffs and Debt Management

If that’s the case, we either make more money or spend less. However, with an established budget already in place, we must be careful about our financial decisions moving forward.

From a practical standpoint, if the Department of Education were to disappear, chaos would ensue. Besides having to reshuffle, transfer, or lay off thousands of employees, which would negatively impact the economy, there’s the snowball effect of what follows.

But with all the chaos, student loans would not be eliminated. The debt gets transferred from one department to another, and the obligation continues. The remaining issue is how much will be paid under Trump’s administration.

Thank you for the question, and I hope this helps. Feel free to post questions on the YouTube video, which you can access below.

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