Secret Trump Administration Plan to Remove Federal Student Aid Office from ED Will Cause Irreparable Harm to Borrowers
FOR IMMEDIATE RELEASE
October 16, 2026
Contact:
Natalia Abrams
WASHINGTON, D.C. — Student Debt Crisis Center (SDCC) condemns the secret plan authored by the Trump Administration to remove the Federal Student Aid office from the Department of Education. In the last year, the White House and Department of Education have rushed to implement certain provisions of the One Big Beautiful Bill Act, resulting in poor execution of changes to federal student loans and major issues for borrowers. With changes ranging from new repayment plans to lending limits, horrific administrative errors plaguing the system have cost borrowers thousands of dollars. Establishing FSA as an independent agency is not only irresponsible, it is a fundamental betrayal of the more than 40 million student loan borrowers it serves. Establishing an entirely new agency in less than a year will only create a new wave of errors and obstacles for borrowers to navigate alongside the ongoing disarray caused by the end of the SAVE Plan, Public Service Loan Forgiveness (PSLF) glitches, servicer errors, and more.
"This level of continued disregard for student loan borrowers highlights how little the Trump Administration cares about the financial stability of borrowers. Planning to move a vital government office is reckless – and it will undoubtedly cause more bureaucracy, chaos, and overall harm for borrowers," said Natalia Abrams, SDCC President. “A haphazard move of the entity managing $1.6 trillion in student loans as part of the larger attempt to dismantle the Department of Education is not only senseless, it’s doomed to fail and ruin the lives of more than 40 million Americans.”
Rapidly dismantling the Department of Education and the student loan system positions borrowers as pawns, intentionally forcing them to assume the financial burdens that accompany it. The Trump Administration has already ensured that the Federal Student Aid office’s capability is limited by eliminating almost half of ED’s workforce in 2025— an issue sure to be exacerbated by this new discovery.
With over 9 million borrowers currently in default and new student loan errors surfacing every week, SDCC urges the White House to stop dismantling the Department of Education and immediately pause all student loan payments and interest. SDCC will continue monitoring this situation and provide updates and resources to affected borrowers.
For more information or to schedule an interview, please contact Natalia Abrams via email natalia@studentdebtcrisis.org.
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ABOUT Student Debt Crisis Center
Student Debt Crisis Center is a national advocacy organization with nearly 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.
