Trump Administration Transfers Federal Student Loan Management to SBA in Major Restructuring Effort to Streamline Operations and Cut Costs

In a significant restructuring move, President Donald Trump announced that the Small Business Administration (SBA) will take over the management of the federal student loan portfolio from the U.S. Department of Education. This decision is part of a broader strategy to streamline federal operations and reduce government spending. The SBA, traditionally focused on supporting small businesses through loan guarantees and disaster assistance programs, will now manage a substantial portion of the nation’s educational debt.

The SBA stated that it plans to reduce its workforce by 43%, a measure expected to save over $435 million annually by the next fiscal year. This reduction is part of the Trump administration’s efforts to decrease the size of the federal bureaucracy. The agency emphasized that this strategic reorganization aims to restore the efficiency seen during the first Trump administration while maintaining its core mission of promoting small business growth.

President Trump highlighted the complexity of the federal student loan portfolio, which includes tens of thousands of loans and represents a significant financial undertaking. The outstanding federal education debt currently exceeds $1.6 trillion, affecting more than 40 million Americans. Trump expressed confidence in the SBA’s ability to manage this portfolio, stating that the agency is well-prepared for the task.

The SBA employs approximately 6,500 individuals, which constitutes less than half a percent of the entire federal workforce. The shift of responsibilities from the Department of Education to the SBA marks a notable change in the administration of federal student loans, reflecting the Trump administration’s focus on reducing government size and improving operational efficiency.