Student Loans: Senator Shares Good News for Borrowers on Trump Admin Plans

Newsweek

a day ago

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Student loan borrowers received some good news as Senator Elizabeth Warren questioned Secretary of Education Linda McMahon on Tuesday.
McMahon told Warren that she had no legal authority to dismantle the Education Department despite efforts to dissolve the agency and move its duties to the Small Business Administration and the Department of Health and Human Services.
Newsweek reached out to the Department of Education for comment via email.
Why It Matters
On Friday, President Donald Trump asked the Supreme Court for permission to dismantle the Department of Education, potentially returning control and a substantial amount of funding to state and local governments.
The U.S. Department of Education provides federal grants to schools and programs nationwide and also oversees $1.6 trillion in student loans held by American borrowers.
What To Know
In her meeting with Warren on Tuesday, McMahon confirmed that she lacks the legal authority to end the department and shift its responsibilities to other agencies.
"My job as a U.S. Senator is to conduct oversight and hold officials' feet to the fire when they are actively harming the American people. I was able to secure important commitments from Education Secretary McMahon, which will make a real difference for people with student loans," Warren, a Massachusetts Democrat, said in a statement.
"But at a time when President Trump and Republicans in Congress are trying to make it more expensive for students from working-class families to get ahead, I will not stop fighting to ensure that every student has access to affordable, quality education in America."
Education Secretary Linda McMahon testifies during a Senate Appropriations Committee hearing on June 3, 2025, in Washington, D.C.
Education Secretary Linda McMahon testifies during a Senate Appropriations Committee hearing on June 3, 2025, in Washington, D.C.While McMahon did not indicate that the Trump administration wouldn't continue its efforts to dismantle the department, actions by Congress would be necessary to legally end the agency.
"McMahon didn't just say she didn't have the intention to do it—she said that she is legally barred from doing it," Warren said. "I asked her about the legal authority she would have to transfer any part of the functions of the Department of Education somewhere else, for example, to the SBA, and she said, 'I can't do that. That is the job of Congress.' There was no ambiguity in her answer."
In March, McMahon announced plans for mass layoffs within the Education Department, leaving the agency with just 2,183 workers, down from 4,133 when Trump took office in January.
However, U.S. District Judge Myong Joun ruled in May that the administration must reinstate employees who were terminated and cease efforts to dismantle the larger department.
"Trump hasn't officially dismantled the Department of Education. We have a system of checks and balances and he cannot do this without an act of Congress. But that hasn't stopped him from gutting it from the inside," Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
"We've seen mass layoffs. Loan collections are back in full force, deferments are ending, and many of the protections from the Biden era, like the SAVE plan and other forgiveness measures, are either paused, blocked by the courts, or simply ignored."
McMahon also confirmed that she does not intend to restart Social Security offsets for people with defaulted student loans and will reimplement the income-driven repayment payment count tracker to the studentaid.gov site. This allowed borrowers to more easily track their progress toward debt relief.
"The Education Secretary has assured me that the pause that is currently in place will stay in place and if there is to be any change in that, she would get in touch with me directly before we go there," Warren said.
However, when it comes to students who could benefit from student aid in the future, Pell Grants are no longer a safe bet. McMahon recommended cuts to the Pell Grant program due to budget concerns, saying that it was ultimately up to Congress to decide whether to fund the program.
In the 2022-2023 school year, more than 6 million college students received Pell Grants, with 97 percent of those students coming from families earning less than $70,000 per year.
What People Are Saying
Senator Elizabeth Warren, in a statement: "McMahon purported to be a supporter of Pell and said that she thought these changes were necessary for fiscal responsibility. The idea that the Republicans want to cut Pell further, I can already say categorically, is a really bad idea and it's going to mean that we're going to lose some number of young people who want to get an education and who ultimately benefit this country when they get an education."
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Linda McMahon doesn't have the power to shut the Department down, but that hasn't stopped her from trying to scale it back. She's talked about cutting programs like Pell Grants, citing budget concerns, but those moves still need congressional approval."
"What she is doing is pushing for budget cuts, cutting grants, and undermining forgiveness programs. The message is clear, 'you will pay the money back.'"
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "As frustrating as it may be to hear, the answer to many current questions surrounding the Department of Education is 'We don't know.' The discussion of the administration's role is dissolving it remains a topic of multiple courts and Congress, as well as just what authority the department has in other changes they are proposing."
What Happens Next
As borrowers face additional changes under the current Department of Education, experts encourage them to continue paying off their debts, as former President Joe Biden's era of student loan forgiveness is likely over.
"For student loan borrowers, the best plan at the moment is to continue to pay back your debt to your provider each month as you always would," Beene said. "It's going to take time to legally and legislatively see what actual alterations will come."