ED Reopens IDR Loan Applications as Trump Proposes Shifting Student Loan Management to SBA
Published April 07, 2025
By AACOM Government Relations
Federal Policy
Financial Aid
OME Advocate
- On March 26, 2025, the U.S. Department of Education (ED) reopened the online application process for income-driven repayment (IDR) plans and loan consolidation after removing them from their website in February.
- In response to the initial removal, the American Federation of Teachers filed a lawsuit, claiming it unlawfully restricted access to IDR plans—critical for Public Service Loan Forgiveness eligibility.
- Meanwhile, following the Executive Order signed on March 20, 2025, that would dismantle ED, President Trump indicated his plans to transfer functions of ED, including student loans and programs that benefit students with disabilities or special needs, to the Small Business Administration (SBA) and HHS respectively.
- At this time, no timeline has been provided, and it is unclear how the Administration plans to operationalize this directive, particularly as the Federal Student Aid office is statutorily mandated to be housed at ED.
- The proposal has drawn criticism, with many lawmakers questioning the SBA’s capacity to manage the complexities of student loans. Legal challenges are likely.
|
