President Donald Trump's plans to close the U.S. Department of Education have run headlong into an awkward reality: The agency does important work that still needs doing.
Major changes to federal student loans take effect July 1, 2026, cutting repayment options and changing terms for many borrowers. The overhaul also sets new limits on graduate and Parent PLUS loans, while some current borrowers may keep existing plans.
A key office in the Department of Education responsible for fielding grievances about student loans has a backlog of more than 27,000 complaints after losing nearly two-thirds of its staff.
Trump has pushed to dismantle the Education Department, but his new spending law gives it major new responsibilities, including expanded Pell Grants and loan repayment plans. The move ironically strengthens the agency he wanted to shut down.
The Education Department plans to reopen applications for income-driven student loan repayment programs as soon as Wednesday, allowing borrowers to once again cap monthly payments based on their income.
President Donald Trump issued an executive order that limits which nonprofit organizations qualify for Public Service Loan Forgiveness based on whether they participate in "illegal" or "harmful" activities.
