President Trump signed an executive order on Thursday in an attempt to close the Department of Education.
“We are sending education to the United States, where it belongs rightly,” said Secretary of Education Linda McMahon in a statement after Trump signed the order.
But they are not about to let the debtors go out. Those states, after all, are not banks, and the Department of Education is a large bank in anything but. It lends tens of billions of dollars to students and parents every year and supervises the collection of approximately $ 1.6 billion on pending loans for more than 40 million borrowers.
The federal government full of debts will not give up that money. So, if the Department of Education closed, another federal entity would take the loan system. In the short term, any agency that inherits the loan portfolio would need to keep administrators who charge and track payments.
What else could change? Here are some possible answers.
Can the president close the education department with an executive order?
Probably not. Congress approval is needed to close a federal agency, as McMahon said at her confirmation hearing.
“This is a political theater, not a serious public policy,” said Ted Mitchell, a former deputy secretary of Education who is now president of the American Council on Education, a group of university members.
This could be true or largely, unless the White House turns the department without the approval of the Congress and tries to win the demands that would probably occur. Trump pointed out Thursday that he can also ask the Congress to act.
What happens if there is a closure anyway, either through a vote in Congress, a judicial ruling or any other way?
Another other federal entity must take charge of the issuance of debt and collection. Trump announced on Friday that student loans will move under the administration of small businesses.
Employees of the Department of Education could change departments to preserve institutional memory on how to manage often complex loan programs and interpret their terms.
How disorderly any transfer of my loans could end?
Quite messy. The debt payment system is complicated, with highly technical rules and payment plans and many student loan administrators that track and collect payments. Borrowers must always keep records of their loans and all previous payments.
Can new loans be delayed?
It is possible. Presumably, any new supervisor would aim to make the transition orderly and schedule delivery during a part of the year in which not many people received new loans.
On March 11, the Department of Education sent dismissal notices to more than 1,000 employees as part of its effort to reduce their workforce in half (including people who have already left since the inauguration of Mr. Trump).
While these dismissals are the subject of demands, other employees with relevant experience in student loans may have left or leave under their own volition. It could be difficult for borrowers to obtain a quick resolution to many complicated problems for an indefinite period to come.
“To affirm that eliminating half of the department will not affect its services, without any clear plan to redistribute the workload, it is, in the best case, naive and, in the worst, deliberately misleading,” said Beth Maglione, an interim president of the National Association of Student Financial Aid Administrators. “It also raises serious concerns about how billions of dollars in federal aid for students will continue disbursed to students without interruption.”
Should I continue to pay my student loan?
Yeah.
My loans have been in pause. What now?
Carefully read each communication of your loan administrator and follow the letter instructions. See your spam folders frequently and check twice to make sure the administrator has your correct paper email address. If your administrator will no longer administer your debt, you must inform you months before any change.
Can I grant federal loans in the future?
If the Department of Education closes, some other department or entity could become the lender.
Republicans have reached a long -term objective that private companies handle student loans, with the federal government as a kind of guarantor behind the debt.
What will happen to popular programs such as reimbursement based on income, forgiveness of public service loans and Pell subsidies?
All these programs exist due to laws.
“We should certainly honor those programs,” McMahon said about the forgiveness of the public service loan during his confirmation hearing. He also promised to maintain Pell subsidies and said he supported his expansion.
So presumably some government entity would continue to supervise each of them. But Congress can try to alter or finish any of them.
What other changes could come?
Trump issued an executive order in an attempt to prevent borrowers from registering in the public service loan forgiveness program that their loans are canceled if they work for disadvantaged organizations by their administration.
This would include any entity that supports terrorism, “participating in violence with the purpose of obstructing or influence Public, the fast of discrimination “and those who are violating state turtle laws” including laws against the transaction of disorderly behavior, scarce public, illegal values ​​”and those who are violating the laws of state torture.”
Anything that is swept surely triggers demands. It is not clear how soon the Department of Education will try to establish any of that.
Elon Musk’s allies, which were integrated into the headquarters of the Department of Education shortly after the inauguration of Trump, have also discussed the use of chatbots enabled for software to replace workers who help answer questions for parents and borrowers.
