Trump Orders The SBA To Handle Federal Student Loans, Delegates 'Special Needs' To HHS

U.S. President Donald Trump holds up an executive order after signing it during an indoor inauguration parade at Capital One Arena on January 20, 2025 in Washington, DC.

President Donald Trump announced on Friday that the Small Business Administration (SBA) will “immediately” take over the handling of all federal student loans, as opposed to the U.S. Department of Education.

“We have a portfolio that is very large, lots of loans, tens of thousands of loans, pretty complicated deal,” Trump said in the Oval Office on Friday. “That’s coming out of the Department of Education immediately.”

 President Trump announces that the SBA will begin handling student loans — and that HHS will handle the special needs and nutrition programs.

"Coming out of the Department of Education immediately." pic.twitter.com/2gbz2n2Q7s

— Rapid Response 47 (@RapidResponse47) March 21, 2025

President Trump also announced that the U.S. Department of Health and Human Services, led by Robert F. Kennedy Jr. (RFK Jr.) “will be handling special needs and all the nutrition programs and everything else.”

“I think that will work out very well. Those two elements will be taken out of the Department of Education, and then all we have to do is get the students to get guidance from the people that love them and cherish them” Trump stated.

“Pell Grants, Title 1, funding resources for children with disabilities and special needs will be preserved, fully preserved,” Trump added on Thursday prior to signing the executive order. “They’re going to be preserved in full and redistributed to various other agencies and departments that will take very good care of them.”

President Trump’s announcement follows after he ordered the U.S. Education Department to be dismantled — though the department cannot be completely dissolved without approval from Congress first.

The outstanding federal student loans exceed $1.6 trillion, as over 40 million Americans still hold student loan debt.

Trump’s executive order called on Education Secretary Linda McMahon “to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities.”

However, it is somewhat unclear as to how or when the loans will be transferred, and if borrows will experience disruptions or errors as the loans shift over to the other agency.

Along with the new workload, the Small Business Administration also recently announced that it will cut its workforce by 43%, from around 2,700 positions, down to 6,500.

“They’re all set for it,” President Trump stated of the SBA. “They’re waiting for it.”

Meanwhile, Student Borrow Protection Center Executive Director Mike Pierce, a Trump critic, slammed President Trump’s order.

“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,” Pierce claimed.

Legal analysts say that President Trump’s order is likely to be challenged in court, pertaining to the Higher Education Act of 1965 — which requires the Federal Student Aid Office to work under the secretary of education.

Soon after, American Federation of Teachers (AFT) President Randi Weingarten responded to President Trump’s executive order as well.

“Congress has charged the secretary of education with administering the federal student aid program by issuing student loans and grants to support students’ attainment of higher education,” stated AFT press secretary Andrew Crook. “The department’s office of Federal Student Aid is statutorily mandated to do so and has the unique expertise to manage the complex student aid program.”

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