Trump’s Order to Dismantle Education Department Sparks Chaos in Student Loans

Former President Donald Trump's recent executive order to dismantle the U.S. Department of Education has sent shockwaves through the student loan sector, causing widespread uncertainty and chaos among borrowers. The order, which aims to redistribute the department's responsibilities to state governments, has left millions of students and graduates in limbo regarding their loan forgiveness and repayment plans.

According to NPR, the move could potentially halt or alter existing student loan forgiveness programs, leaving many borrowers without the relief they were counting on. Slate reports that the sudden shift has led to confusion and fear among students, as the future of their financial aid remains uncertain. Business Insider highlights the potential long-term effects on borrowers, suggesting that without a centralized federal agency, the management of student loans could become fragmented and inconsistent across states.

CNBC delves into the broader implications for financial aid, noting that the absence of the Department of Education could disrupt the entire system of federal student aid, from Pell Grants to work-study programs. As the situation unfolds, borrowers and educational institutions alike are bracing for significant changes in how student loans are administered and managed.

• Department of Education
• Donald Trump
• Student Loans

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What is happening with student loans?

The Education Department is being cut in half. Here's what's being lost. They're talking about the fact that 8 million federal student loan borrowers are waiting for the courts to decide if their repayment plan is legal at the same time another 9 million are late on their payments and may be plunging toward default.

What happens to FAFSA?

Once your FAFSA form is processed, your Institutional Student Information Record (ISIR) is sent to the colleges or career schools you listed on your FAFSA form. Those colleges and career schools are responsible for creating your aid offer and disbursing your financial aid.