Education staff are being scattered across several other federal agencies. Despite the Trump administration's claims, employees say it's adding bureaucracy and making it harder to serve students.
Federal data shows many borrowers who aren't paying their loans went to private, for-profit colleges — schools that often market to low-income students and rely on federal financial aid for revenue.
The leader of the Education Department's special education office told employees she is resigning after less than four months in the role and as the agency overall is morphing and shrinking.
The borrowers say they were defrauded by their colleges, but the class-action lawsuit to erase their federal student loans has been tangled up in courts for years.
The idea that there's a connection between federal student loans and what colleges charge dates back almost four decades. But it's unclear that link can lead to lower costs.
The moves to the federal departments of Health and Human Services and Justice, respectively, would further dismantle an agency that President Donald Trump has vowed to close.
In August, Education Department employees will relocate to a smaller office roughly a block away, and the larger Energy Department will take over the old headquarters.
The Trump administration announced a three-phase transition that will eventually include management of most federal student loans as well as the Free Application for Federal Student Aid (FAFSA).
Without this Education Department oversight, borrowers could "be placed in the wrong loan repayment status, billed for incorrect amounts" and more, the U.S. Government Accountability Office says.
A new report from the U.S. Government Accountability Office calculates the cost of efforts to fire civil rights staff and questions the department's ability to enforce federal civil rights laws.
About 5.5 million borrowers are currently in default. They haven't risked wage garnishment since the beginning of the pandemic, when policymakers paused the practice.
Legal challenges put SAVE borrowers in limbo for months, a time during which they were not required to make payments on their loans. That would change if the proposed settlement is approved.
