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The Education Department (ED) recently took a big step closer to closure.
The Trump administration announced Thursday an interagency agreement between ED and Treasury to move student loan operations to Treasury, “which will assume responsibility for collecting defaulted student loan debt and provide operational support to ED’s efforts to restore borrowers to repayment,” ED said in a release.
“I think we’ve been very clear this past week that this is a multi-stage process,” Nicholas Kent, the Undersecretary of Education, told Fox News Digital on Monday.
DEPARTMENT OF EDUCATION TO RETURN EARTH-BASED METHODS TO GOVERNMENT FUNDING
US Department of Education building in Washington, DC (Erin Scott/Bloomberg via Getty Images)
Throughout the 2024 campaign, then-candidate Donald Trump promised to eliminate the Department of Education and signed an executive order directing his administration to and began to dismantle it.
“The Secretary has been on the record saying that these interagency agreements are proof of concept, that we want to show Congress, that we want to show families, we want to show moms and dads and families that the Department of Education doesn’t need to be here to get federal grant aid and student loans to keep flowing to borrowers,” Kent said.
Andrew Gillen of the Cato Institute told Fox News Digital that this shift in commitments is important because previous collaboration agreements were “relatively small.”
“Although this initiative for student loans – this is a large number of employees and a large budget for the Department of Education. So, if it is sent to the Treasury, this really indicates that this is moving a large part of the Department of Education to another place,” said Gillen.
“I think that’s fair,” Kent said, agreeing with Gillen’s analysis. “Describing it as the biggest move to eliminate the Department of Education is the right way to think about it.”
The interagency agreement follows the Trump administration’s attempt to devolve the office and several of its programs to other federal agencies as it works to dismantle the federal department entirely.
TRUMP ADMIN CUTS RED TAPE AS IOWA LOOKS AT STATE EDUCATION RESTORATION
The Department of Education (ED) recently took a big step closer to a shutdown, an expert told Fox News Digital. (Getty Images)
“Cutting through the layers of red tape in Washington is an important part of our ultimate goal,” Education Secretary Linda McMahon said in a press release. “As we partner with these institutions to improve federal programs, we will continue to gather best practices from each state through our 50-state tour, empower local leaders in K-12 education, restore excellence to higher education, and work with Congress to enact these reforms.”
The department added that shifting the student loan obligations to the Treasury “will reduce the continued deterioration and cost to taxpayers due to the Biden Administration’s mismanagement of the Federal student loan portfolio, and facilitate the return of defaulting borrowers to repayment.”
Total student loan debt is estimated at $1.7 trillion, according to the department. It said that less than 40% of borrowers arrange a repayment plan and about 25% of them default.
“This will benefit students by simplifying the aid application and student loan repayment processes and save taxpayers money by reducing student loan defaults,” Gillen told Fox News Digital. Once this measure is completed, major Education budget and staffing needs will be handled elsewhere, making it easier to close the Department of Education.
The Trump administration announced a cooperative agreement between the Department of Education and the Treasury Department to transfer student loans to the Treasury. (Mandel Ngan/AFP/Getty Images)
MCMAHON COMES TO ASSURE PARENTS WITH SPECIFIC NEEDS THAT FUNDING WILL CONTINUE WHILE THE DEPARTMENT IS CLOSED.
ED has made “historic progress in such a short period of time,” according to Kent.
“Within a year, we have reduced the size of the department by more than 40%. We have made 10 interagency agreements. We have made many staff details in other agencies where the employees in the department are staying in other agencies,” he said. “We are showing Congress and others that this proof of concept works and that we want to continue working with Congress to keep these changes in the law and the ultimate goal of closing the door and putting them out of business.”
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