On March 21, 2025, President Trump announced a proposal to transfer the management of student loans from the Department of Education (ED) to the Small Business Administration (SBA) and move special needs programs from the ED to the Department of Health and Human Services (HHS).
The administration claims to leverage the SBA’s financial expertise to better support borrowers and align special needs services with the HHS’s health care mission.
These shifts would require significant operational shifts within the receiving agencies, including development of new infrastructure, staffing plans, and oversight mechanisms. The scale of the transition raises questions about implementation timelines, continuity of services, and agency readiness. Notably, the SBA announced a 43% workforce reduction on the same day.
Student Borrowers Should Know:
- Student borrowers should continue paying their loans to their servicer until they hear differently. Transferring loans to another agency does not cancel them.
- Experts advise that the terms and conditions of your federal student loans cannot change even if the overseeing agency changes, as your rights were guaranteed under the master promissory note you signed when your loans originated.
- It is not clear when the transition of loans from the ED to SBA will occur. It is likely that legal challenges will delay or pause changes.
- Student borrowers should document what they owe, download documents that track their payment history, and stay informed during the transition.
As this proposal moves forward, we will continue to monitor its development and assess its impact on the affected communities.