President Trump signed an executive order on Thursday to close the educational department.
“We will send education back to the states, where it rightly belongs,” said Linda McMahon in an explanation after Mr. Trump signed the command.
But they are not about to let debtor off the hook. After all, these states are not banks, and the educational department is a large bank in all names. It gives students and parents tens of billions of dollars every year and supervises the collection of around 1.6 trillion dollars of outstanding loans for over 40 million borrowers.
The debt -related federal government will not give up this money. If the educational department is closed, another federal company would take over the loan system. In the short term, every agency that inherits the loan sports folio would have to keep the serviceers who collect and pursue payments.
What else could change? Here are some possible answers.
Can the President hire the educational department with an executive order?
Probably not. The approval of the congress is necessary to close a federal authority, as Ms. McMahon stated in her hearing for confirmation.
“This is a political theater, not a serious public order,” said Ted Mitchell, a former Sub -State Secretary of Education, who is now President of the American Council on Education, a university membership group.
This could be true or mostly – unless the white house closes the department without the consent of the congress and tries to win the complaints that would most likely follow. On Thursday, Mr. Trump signaled that he could also ask the congress to act.
What if a shutdown happens anyway – whether by voting in the congress, a court decision or other ways?
Some other federal companies have to take over the debt edition and collecting. Mr. Trump announced on Friday that student loans will change under the small business administration.
The employees of the educational department could change the departments in order to maintain institutional memory, how the often complex credit programs can be carried out and their conditions can be interpreted.
How chaotic could a transfer of my loans be?
Quite chaotic. The debt repayment system is complicated, with high -technical rules and repayment plans as well as many student darums who pursue and call up payments. Borrowers should always manage records of their loans and all previous payments.
Could payments of new loans be delayed?
It is possible. Presumably, every new supervisor would aim to make the transition properly and to plan the handover in part of the year in which not many people received new loans.
On March 11, the educational department sent the educational department to reduce its workforce by half (including people who have been inauguration since Mr. Trump), to over 1,000 employees subject to dismissal.
While these layoffs are the subject of legal proceedings, other employees with a relevant borrowing skills may already have gone or will assume their own will. It could be difficult for borrowers to get a quick solution for many complicated problems for an indefinite period.
“The assertion that the elimination of half of the department will not affect your services – without a clear plan to redistribute the workload – is at best naive and, in the worst case, is deliberately misleading,” said Beth Maglione, interim president of the National Association of Student Financial AID Administrator. “It also raises serious concerns about how billions of dollars of federal study aids will continue to be paid out without interruption to students.”
Should I continue my student loan payments?
Yes.
My loans were a break. What now?
Read every communication from your loan service carefully and follow the instructions for the letter. Check your spam folder frequently and check it to ensure that the serviceer has your correct paper email address. If your service no longer manages your debts, you should know months before a change.
Can I record federal loans in the future?
If the educational department closes, another department or another company could become a lender.
The Republicans have made it a long -term goal that private companies take over the loans for students, with the federal government breaks down a kind of warranty of debt.
What happens with popular programs such as income-driven repayment, forgiveness for public service loans and pell grants?
All of these programs exist due to laws.
“We should definitely honor these programs,” said Ms. McMahon about the forgiveness of the public service loan during her hearing. She also promised to maintain Pell grants and said she supported her expansion.
Some state units would probably continue to monitor each of them. However, the congress can try to change or end one of them.
What other changes could come?
Mr. Trump gave an executive order to prevent borrowers from being enrolled in the program for forgiveness for the public service if they work unfavorably for organizations.
This would include all companies that support terrorism, “violence to disability or influence the policy of the Federal Government”, child abuse “, including chemical or surgical castration or mutilation of children, employers” a pattern of support for the aid and the department of illegal differences “and those who violate state legal disputes.
Everything this Drewing certainly triggers. It is not clear how soon the educational department will try to build some of it.
Allies of Elon Musk, who embedded themselves to the headquarters of the educational department shortly after the inauguration of Mr. Trump, also discussed the use of software-capable chatbots to replace employees who help to answer questions for parents and borrowers.