Published March 21, 2025

05:42 PM EDT

President Donald Trump in the Oval Office of the White House in Washington, D.C. on March 21, 2025.

Yuri Gripas / Abaca / Bloomberg via Getty Images

Key Takeaways

  • President Donald Trump said Friday the Small Business Administration will take on the country’s federal student loan portfolio, as part of his dismantling of the Department of Education.
  • The SBA is downsizing at the same time it is taking on the $1.6 trillion loan portfolio, announcing a 43% staff cut the same day.
  • Trump said the move would improve student loan servicing, though it drew criticism from some advocacy groups for student loan borrowers.

If you’re one of the 43 million Americans with student loans, you could soon be making payments to the Small Business Administration rather than the Department of Education, as part of President Donald Trump’s latest shakeup of the federal government.

Trump said Friday that the SBA, an agency that supports small businesses with loans and other programs, would handle the country’s $1.6 trillion portfolio of student loan debt as part of his dismantling of the Department of Education. Currently, the DOE manages the loans, relying on several private servicing companies to handle payments and customer service.

“We have a portfolio that’s very large, lots of loans, tens of thousands of loans—pretty complicated deal. And that’s coming out of the Department of Education immediately,” Trump said in the Oval Office Friday. “It’ll be serviced much better than it has in the past. It’s been a mess.”

The same day, SBA director Kelly Loeffler said the new home of the loan portfolio was cutting its staff by 43%.

“As the government’s largest guarantor of business loans, the SBA stands ready to deploy its resources and expertise on behalf of America’s taxpayers and students,” Loeffler posted on X.

In recent months, student loan borrowers have faced disruptions, and in some cases, dramatically higher monthly payments on income-driven repayment plans amid court battles over a the fate of the SAVE repayment plan created by former president Joe Biden’s administration.

The move drew criticism from at least one group that advocates for student loan borrowers.

“Moving the student loan program to the SBA is illegal, unserious, and a clear attempt to distract the public from the fact that Trump has broken the student loan system and is actively cheating millions of borrowers out of their rights,” Mike Pierce, executive director of the Student Borrower Protection Center, said in a statement.

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