Trump Moves Student Loans To SBA: What 40 Million Borrowers Should Know

WASHINGTON, DC - JANUARY 20: President Donald Trump signs executive orders in the Oval Office of the ... More White House on January 20, 2025 in Washington, DC. Trump takes office for his second term as the 47th president of the United States. (Photo by Anna Moneymaker/Getty Images)
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Trump Student Loan Transfer: What Student Loan Borrowers Need To Know
President Donald Trump has directed that the federal student loan program – a portfolio of roughly $1.6 trillion owed by 43 million borrowers – be shifted from the Education Department to the Small Business Administration. Announcing the move in the Oval Office, Trump said, "I’ve decided that the SBA… will handle all of the student loan portfolios… [out of]
the Department of Education immediately", adding that SBA Administrator Kelly Loeffler and her team are "all set" and that the federal loan program will “be serviced much better than it has in the past. It’s been a mess,” a post on Forbes noted. ​
This unprecedented change comes from Trump’s effort to dismantle the Department of Education via executive order. The SBA, a much smaller agency traditionally focused on aiding small businesses, would suddenly oversee the nation's federal student lending system.
ForbesTrump Plans To Eliminate Education Department, Leaked Memo Draft ShowsBy Shahar Ziv
What Won’t Change For Student Loan Borrowers
Despite the seismic shift in federal student loan management oversight, experts underscore that borrowers’ obligations and rights remain the same. The terms of federal student loans are set by law and contract, not by which agency manages the accounts. As CNBC reported, "the terms and conditions of … federal student loans cannot change even if the agency overseeing them does" because "borrowers' rights were guaranteed when they signed the master promissory note when their loans were originated."​
In practical terms, this means that your interest rate, repayment schedule, and available programs are established by federal law and your loan agreement – and those don't vanish with an agency move. Borrowers still owe whatever debt they borrowed, and no blanket loan forgiveness or cancellation is triggered by moving the portfolio to the SBA.