What is the future of student loans and FAFSA if the Ministry of Education is in trouble?

Although the Trump administration has reopened its income repayment program based on student loan borrowers, the future of federal financial aid remains very uncertain. On March 20, U.S. President Donald Trump signed an executive order to start closing the federal Department of Education and transferring the management of student loans to the Small Business Administration.

Trump announced that press secretary Karoline Leavitt told reporters that student loans and Pell grants will still be used up. Education Secretary Linda McMahon echoed Trump’s views in an interview with CNN on Sunday.

“[Student loans] “There will be going to the Small Business Administration. There will be no funding,” McMahon said.

A key function of the department is government grants such as federal student financial aid and student loans. If the Department of Education shuts down, what does that mean for federal student aid or FAFSA free application?

White House actions have weakened the Department of Education – On March 11, agent staff were cut nearly half, while the SupithedAid.gov website lasted for several hours.

“The reductions in these workforces raise serious questions about the future functions of the federal aid program,” student loan expert Elaine Rubin said in an email. “There is very little communication about how the department plans to maintain effective action and prevent interference.”

If the SBA takes over managing student loans, then resources will be fewer. The agency announced on Friday that it would cut its workforce by 43%.

If you are worried about filling out the 2025-26 FAFSA or the FAFSA you have submitted, this is what you need to know.

Is FAFSA gone?

Even if the Ministry of Education is eliminated, experts do not believe that federal student aid or FAFSA will not disappear.

“Software systems and call centers are through contractors, but important work is still being done internally,” student loan expert Mark Kantrowitz said in an email. “The termination of employees after last year’s FAFSA fiasco could be a disaster.”

Rubin pointed out that FAFSA is not only a “trigger application” for federal financial aid programs, but also a “trigger application” for many state and institutional aid programs.

“Replacing FAFSA would be a huge task, but that doesn’t mean it’s impossible at some point,” Rubin said. Because the complex network of programs relies on the application, “we really didn’t expect FAFSA to disappear at this time.”

Where else can FAFSA go?

Before Trump announced the announcement on Friday, the most obvious choice for the new FAFSA home is the Treasury Department or the IRS because the FAFSA form is already connected to the IRS system to upload tax return data.

Kantrowitz initially told CNET that the Treasury would be the most likely destination for student loan programs. After Trump announced the news on Friday, Kantrowitz pointed out that transferring student loans and FAFSA to the Small Business Administration still requires Congressional approval.

He added that the federal government must continue to manage and manage student aid regardless of the agency’s type of agency.

“States cannot process student loans,” Cantrovitz said. “Private lenders lack the ability and appetite to privatize the federal student loan portfolio.”

If FAFSA does move, borrowers may not notice a big difference, depending on who is running the program, Kantrowitz said.

“Most features [of student loan programs] “Implemented through contractors. SBAs lack experience in managing and collecting student loans. If they transfer relevant FSA staff and continue to use existing student loan service staff, the interruption should be minimal. Otherwise, there will be a lot of confusion and confusion for the borrower.”

Should you also submit a FAFSA?

If you need help paying for the university, experts say you should continue to use FAFSA. This form is used to determine your eligibility for financial aid, including Pell Grants, scholarships, exercise programs, and student loans.

Rubin noted that a group of people who are concerned about completing the FAFSA form: students who need to report undocumented immigrants. Applicants with eligible documents may be eligible for financial assistance; the status of financial “contributors” (such as parents and spouses) does not affect eligibility.

The Privacy Act of 1974 prohibits the agency from sharing certain identifying information without written consent or explicit agreement. Under the current agreement, the department shares the applicant’s (but not the contributor) FAFSA information with the Department of Homeland Security to verify the applicant’s identity. However, the government’s positive stance on undocumented immigration has caused many families to worry about submitting information that could be illegally shared with immigration authorities.

She has no general advice for these applicants. “It really has to boil down to…the best fit for the family and what they are about.”

What is the expectation if you submit a FAFSA application

If you have submitted your FAFSA form, the Ministry of Education says your online application will be processed within one to three days (the paper form will take longer).

After the form is processed, you can log in to sudenterAid.gov to view your submission summary and make corrections. However, due to staff layoffs for layoffs, if you have any questions or issues with the app, you should expect delays.

The summary should include your Student Aid Index, which sends the department directly to the schools listed on the FAFSA form. Schools use your SAI to calculate the amount of financial assistance they will provide you. If you are concerned that the school has not received your information to determine your financial aid plan, please contact the school’s financial aid office.