Trump orders transfer of student loan management to the Small Business Administration

President Donald Trump announced Friday that the Small Business Administration (SBA) will take over management of student loans in the United States, immediately removing them from the Department of Education.

"They are all set for it, they are waiting for it. It'll be serviced much better than it has in the past," Trump told reporters from the Oval Office.

The announcement comes a day after Trump signed an executive order directing his administration to dismantle the Department of Education, one of his major campaign promises.

The order instructed Secretary of Education 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."

As part of this process, the department has already laid off about half of its staff.

But this is not the only change that will be managed. The Republican also revealed that the Department of Health and Human Services (HHS) will be in charge of "handling special needs and all of the nutrition programs and everything else," although he did not specify additional details about this transition.

A profound change in the Small Business Administration: Workforce reduction and savings

Shortly before Trump's announcement, the agency reported in a release that it will reduce its workforce by 43%, eliminating approximately 2,700 jobs out of a total of nearly 6,500 workers in a “agency-wide reorganization.”

According to the notice, the decision’s goal is "ending the expansive social policy agenda of the prior Administration, eliminating non-essential roles, and returning to pre-pandemic staffing levels.”

In addition, the release notes that "the average salary of an SBA employee is over $132,000 – more than double the national average wage. The reduction in workforce will save taxpayers more than $435 million annually by FY26."

Decision made, promise kept

Trump's decision to transfer student loans to the SBA had already been decided earlier in the framework of improving government efficiency.

In that sense, on March 6, at the White House, during a press conference he indicated that he was evaluating options such as the Treasury Department, the Commerce Department or the SBA to assume this function.

At that time, a reporter asked about the fate of student loans, "If the education department were eliminated, what agency would handle student loans?" To which Trump replied, "I don't think the education should be handling the loans...I think it will be brought into small business."