Advocates Slam Secret Trump Plan to Eject Federal Student Aid Office from the Education Department, Demand Action to Protect Borrowers

WASHINGTON, D.C. — Today, The Washington Sun reported a secret plan by the U.S. Department of Education to eject the Office of Federal Student Aid (FSA), establishing the government’s scandal-plagued student loan arm as a new, independent federal agency. This action follows more than 18 months of speculation about the future of the student loan program as the Trump Education Department pressed forward with an effort to “dismantle” itself. 

Advocates swiftly condemned today’s announcement as a pointless distraction from the widespread financial harm caused by the Trump Administration’s student loan policies. 

“Changing the name on the agency letterhead will do nothing to lower costs for working-class families squeezed by rising student loan bills and surging college tuition,” said Protect Borrowers Executive Director Mike Pierce. “More than 3 million student loan borrowers defaulted on a loan last year and more than 3 million more are on track to do the same this year. Due to the Trump Administration’s reckless actions, millions have seen their credit scores ruined. As a result, a generation of Americans will be locked out of the mortgage market, denied a typical car loan, and pay far more for a credit card because Linda McMahon cannot be bothered to fix the broken student loan system. The secret plan to eject FSA from the Education Department shows, yet again, that McMahon and Trump care more about pandering to their anti-government base than keeping their promise to tens of millions of Americans who cannot keep up with their bills.” 

“Millions of teachers, nurses, and other public service workers are being buried by rising costs, including out-of-control student loan payments that are a direct result of President Trump’s tax cuts for billionaires and Secretary McMahon’s callous mismanagement of the student debt portfolio,” said AFT President Randi Weingarten. “We had to sue McMahon once to force her to follow the law and respect borrowers’ rights to lower student loan payments and this reorganization won’t solve the issue—it will only make things worse. As voters head to the polls, they should remember that Trump and McMahon pretending to shrink the Department of Education—while in practice throttling its core functions in reams of red tape—is not doing anything to shrink working families’ bills.”

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About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.