The Trump administration just made its boldest move yet toward dismantling the Department of Education—and this time, it’s not just talk. It’s action.
In a major development, the Department of Education announced a new interagency agreement with the Treasury Department that will transfer responsibility for collecting defaulted federal student loans. In simple terms: one of the biggest and most complex functions of the department is being handed off elsewhere.
And no, that’s not a coincidence.
According to Undersecretary of Education Nicholas Kent, this is all part of a “multiphase process” aimed at proving something many conservatives have been saying for years—that the Department of Education doesn’t actually need to exist for student aid and loans to function.
Imagine that… less bureaucracy, same results. Who would’ve thought?
The Treasury Department will now take over operations related to defaulted student loan debt, while also supporting efforts to bring borrowers back into repayment. This shift is being described as the largest step so far in redistributing the department’s responsibilities.
And experts are taking notice.
Andrew Gillen of the Cato Institute pointed out that previous changes were relatively minor, but this move hits the core of the department’s operations—its biggest budget and staffing responsibilities. Translation: this isn’t symbolic, it’s structural.
Kent didn’t disagree.
He confirmed that this is “absolutely the right way” to view the move—as the next and largest step toward winding down the Department of Education entirely.
This aligns directly with President Donald Trump’s long-standing promise to eliminate the department, a goal he reinforced with an executive order directing his administration to begin the process.
Meanwhile, Education Secretary Linda McMahon framed the effort as cutting through federal red tape and empowering local control. The administration has also emphasized that these changes will help fix issues tied to the previous handling of student loans, pointing to rising costs and widespread defaults.
To put it in perspective: nearly $1.7 trillion in student loan debt is currently outstanding, with less than 40% of borrowers in repayment plans and about a quarter already in default. Not exactly a glowing report card for the old system.
The administration argues that moving these responsibilities will streamline processes, reduce taxpayer losses, and ultimately make it easier to shut down the department altogether.
And they’re not slowing down.
Over the past year, the department has already been reduced in size by more than 40%, entered into multiple interagency agreements, and reassigned staff across the federal government—all part of what they call a “proof of concept.”
The goal? Show Congress—and the American people—that education can function without a massive federal bureaucracy sitting in the middle.
The bottom line: this isn’t just reform, it’s a fundamental shift in how education policy is handled at the federal level.
And if the current pace continues, the idea of a smaller, more efficient government handling education might not just be a campaign promise—it could become reality.
