Big changes are unfolding in the U.S. education system—again. Today, March 21, President Donald Trump announced that student loan management will shift from the U.S. Department of Education to the Small Business Administration (SBA), effective immediately. The decision was delivered from the Oval Office and is part of a broader move to dismantle the Department of Education and shift authority over education to the states.
While we don’t yet know exactly how or when this transition will happen—or what it will mean for the 42.7 million Americans holding $1.77 trillion in student loan debt—we do know this: for students, families, and educators alike, this news is jarring.
We see you. Whether you're a high school senior waiting on financial aid to start college, a nursing student balancing debt and coursework, or a STEM instructor advising learners through uncertain times, these developments can feel overwhelming. As always, Labster is keeping a close eye on shifts in the U.S. education landscape, because what happens in policy and administration has a real, human impact in the classroom.
What’s Changing?
According to the USA TODAY article by Sarah D. Wire, this executive order also tasks the Department of Health and Human Services with managing special education and nutrition programs, while instructing Education Secretary Linda McMahon to begin taking steps to close the Department of Education “to the maximum extent appropriate and permitted by law.”
Already, the Federal Student Aid office has laid off half of its staff, creating delays and confusion for colleges processing aid applications. The SBA, meanwhile, has announced its own 43% workforce reduction, adding uncertainty about how it will manage such a massive and complex loan portfolio.
Why the Concern?
The SBA, while experienced in managing loans for small businesses and disaster relief, was heavily criticized for mismanagement and fraud during the COVID-19 relief period—with an estimated $200 billion in potentially fraudulent loans. Critics are worried about how this small agency will handle something as foundational—and sensitive—as federal student aid.
And the timing couldn’t be more stressful. Many students are in the middle of making decisions about college acceptances and financial aid. The support systems they rely on are shifting beneath their feet.
What Does This Mean for You?
Right now, the biggest question is what this change will look like in practice. There are no clear answers yet about how the SBA will take over loan servicing, how existing repayment plans will be managed, or how communication with borrowers will be handled during the transition.
We’re watching all of this unfold because we care about you—the students, instructors, and institutions that form the heart of our mission.
At Labster, we believe in removing barriers to learning, not adding more. Our simulations and tools are designed to make science education more accessible, affordable, and empowering, especially in uncertain times like these. We’ll continue to advocate for clarity, equity, and support in education policy—and we’ll be here with learning solutions that keep students engaged and confident, regardless of what’s happening behind the scenes.
Final Thoughts
Change is in the air, and while this shift brings questions, we hope it also brings an opportunity: a chance to speak up, stay informed, and support one another through the uncertainty.
We’ll keep you posted as this story develops—and we’ll continue to stand with learners and educators every step of the way.
Read the full article from USA TODAY here.
Explore how Labster supports accessible education at labster.com.