OAN Staff Katherine Mosack
4:30 PM – Thursday, July 16, 2026
The Trump administration is reportedly looking into transferring management of the federal student loan program from the U.S. Department of Education to the Small Business Administration (SBA).
According to Politico on Thursday, administration officials are considering the change as part of President Donald Trump’s effort to minimize the Education Department’s role within the administration.
The proposal would shift the responsibility for the student loan system, which serves more than 40 million Americans, to an agency that specializes in supporting small businesses via lending, disaster assistance and counseling programs.
Trump has previously mulled moving federal student lending oversight outside of the Education Department, which is currently in charge of student loan servicing, repayment programs and loan forgiveness.
In March, Trump told reporters at the White House, “I don’t think the Education [Department] should be handling the loans. That’s not their business.”
He noted at the time that it would make sense for the SBA to take on the job, while adding that SBA Administrator Kelly Loeffler liked the idea.
Officials are now reportedly exploring how existing contracts with loan servicers would be handled if a transfer was carried out, Politico reported. Other officials, however, allegedly expressed concerns to the outlet that the SBA likely lacks the proper staffing, technology and institutional experience and expertise required to manage the country’s $1.6 trillion student lending portfolio effectively.
“SBA has a longstanding experience and relationship lending to small businesses,” said Michael Negron, who worked on small business and student loans for the National Economic Council and as an adviser to SBA during former President Joe Biden’s administration. “Anything where you venture outside of that, there are just more risks, not only to the federal government, but also to the borrower.”
Looking forward, the White House is now actively pursuing strategic agency modernization to eliminate bureaucratic overlap, protect taxpayer dollars and deliver a more streamlined experience for American families.
To achieve this, the administration is executing a structured, multi-phase transition to transfer operational management of the $1.7 trillion federal student loan portfolio to the Department of the Treasury — leveraging Treasury’s world-class financial infrastructure and operational expertise.
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