Introduction: A Controversial Proposal

Donald Trump's effort to abolish the United States Department of Education has initiated another controversy in student loan policies in the United States. The White House released a memo on January 27th that placed a temporary halt to financial aid programs. But whereas the suspension is temporary in nature, the potential elimination of the Department of Education (DOE) altogether would permanently redefine the way students borrow loans and receive financial aid. If that is to occur, the ramifications will go far beyond the memo's immediate impact.

The Potential Consequences of Abolishing the DOE

Even though abolishing a government department has to be approved by Congress, the Trump administration is trying to transfer federal management of student loan programs to other governmental departments. If they succeed, America's system of student loans would look very different. It could become more costly and difficult to borrow money to attend college. While the memo amounts to a short-term disruption, abolishing the DOE could effectively transform the entire financial aid apparatus in the U.S.

Image Credit: The New York Times

Take the Quiz: What Kind of Political Personality Are You?

Ever wondered what role you’d play in the political world? Take this fun quiz to find out!

Programs at Risk

The Department of Education is responsible for the federal oversight of student loans. It ensures that the loans have low interest and that the borrowers are well protected. In the absence of the DOE, loans would be handed over to private lenders.

Private lenders tend to have higher interest and offer less protection to borrowers. This shift would result in a broken system with piecemeal rules and add more obstacles for students who are already dealing with complicated financial aid systems. Without federal regulation, students could be subjected to predatory loan terms, debt collection aggression, and reduced repayment options. In brief, the elimination of the DOE would make college more expensive and student debt harder to repay.

Student loans, however, are just a portion of what the DOE accomplishes. The department also operates programs such as Public Service Loan Forgiveness and income-driven repayment plans. Under these programs, borrowers are permitted to lower or even forgive their debt in return for working in public service professions or making payments based on income.

These programs would be drastically altered or done away with entirely if the DOE were abolished. Getting loan forgiveness would become much harder for borrowers.

The DOE also issues Pell Grants and other financial assistance that enables students from impoverished families to go to college. Without cutting, restructuring, or eliminating these grants, students would need to depend more on personal scholarships or loans. That would send the cost even higher, making college even less affordable for many. Currently, students receiving subsidized loans are not charged interest while they are still in school.

However, without the DOE, students would need to begin paying interest right away. This will cause loans to be more expensive in the long term and an added expense to students. States would also assume a larger role in financial aid. This would set up a situation where students in wealthier states get more money, while students in poorer states face drastic cuts.

Image Credit: Gage Skidmore from Wikepedia Commons

Disruptions in the Absence of the DOE

If the Department of Education were to suddenly close, it would result in enormous disruptions. There would be delays in the distribution of loans, uncertainty regarding how students are supposed to repay their loans, and vacancies in the management of financial aid. Students who rely on federal funding may not know where to go for assistance, which would further complicate an already complicated system.

If the Trump administration continues to push to eliminate the DOE, students may have a future with less accessible, more costly, and less regulated education. This will create fewer opportunities for many individuals rather than more.

The Long-Term Impact on Student Loans

This notion of eliminating the DOE is not a minor adjustment to the way the government functions—it would entirely transform the United States system of student loans and financial aid. The recent memo will create short-term confusion, but eliminating the DOE altogether could alter the affordability of college permanently. It would probably make college even more costly, less regulated, and more susceptible to state politics.

The Confusion

Federal safeguards, grants, and loan forgiveness programs would be jeopardized. Students would then have to navigate a broken system, in which regulations are arbitrary, and assistance is not assured.

The question is whether this proposal is seen as a necessary step to reduce government intervention or a devastating blow to the loss of support that many students rely on. One thing is for sure: the future of student loans and the economic ability of many students to go to college is in serious doubt.

Image Credit: Gage Skidmore from Wikepedia Commons

Eliminating the Department of Education would be a reversal of the present system. The DOE now assists in keeping federal loans available, affordable, and equitable. The department also operates programs that permit loan forgiveness or cancellation dependent on income or public service.

These protections and programs could be eliminated without the DOE. That means less choice for students and greater financial pressure on those least able to afford it.

We also cannot disregard the part DOE has to play in enabling higher education to be affordable for poor students. They would need to find other avenues of funding, such as private loans or scholarships that are less available or more expensive, if not for the federal student assistance. This can only make it more difficult for already economically disadvantaged students to pursue higher education. A further problem is the confusion that would follow if the DOE were abolished.

At present, students are aware of where to go for assistance with loans and financial aid. But if the department is dissolved, it may create confusion. Borrowers would have no idea where to turn for assistance or advice. There would be no mechanism for processing loans, answering inquiries, or safeguarding borrowers against unfair practices.

Dissolving the DOE would also likely lead to less regulation of student loan lenders. As it stands, the DOE prescribes guidelines for how loans are to be processed, what protections borrowers have, and how repayment is to be instituted. If the department were dissolved, these regulations would be replaced with a much less structured and more confusing system. With no federal oversight, private lenders would be free to make up their own rules, and this could lead to misleading practices.

Image Credit: White House

A Reversal of Progress

For example, students could be charged higher interest rates, less transparent loan terms, and more forceful debt collection tactics. This isn't an intellectual problem—it's a practical problem that would impact millions of students. If the DOE were abolished, it would be even more difficult and costly than ever to obtain a college degree in the future.

For some students, college would be even more of a financial strain, and for others, it would not even be a viable option. The possible demise of the DOE would also undermine the general mission of making education for all.

Currently, the department is involved in ensuring that everyone—regardless of their income level—has an opportunity to access higher education. With the DOE abolished, that mission would collapse, and the divide between poor and wealthy students would become even more pronounced.Education, and presumably a window to opportunity, can become more unaffordable to those that need it the most.

Conclusion: The Catastrophic Impact

In total, the proposal to eliminate the Department of Education is not one to be taken lightly. Although the new memo is merely a source of short-term confusion, the long-term effects of abolishing the DOE would be catastrophic for students. It would make college more costly, harder to access, and less equitable.

Federal safeguards and student aid programs would vanish, subjecting students to a more fragmented and volatile system. Regardless of whether the transition is viewed as necessary or damaging, one fact is certain: the future of American education is on the line.