What happens to FAFSA and student loans if the Ministry of Education closed?

Federal student loans, including FAFSA, seems to be managed by the small business administration after US President Donald Trump has signed Enforcement order last week until Start excluding the Federal Department of EducationS

Trump has announced that SBA will “immediately” will start dealing with the entire student loan portfolio one day after the press secretary Carolyn Levit He told reporters that student loans and Pell grants would still be exhausted by the Ministry of Education. Education Secretary Linda McMahon sounded Trump’s moods during Interview with CNN On Sunday.

“(Student loans) will go to the small business administration,” McMahon said. “There will be no protection.”

A critical function of the department is the administration of the federal student financial assistance such as grants and student loans. If the Ministry of Education is closed, what does this mean for the free federal assistance for a student or Fafsa?

White House actions have already weakened the Ministry of Education – on March 11, Agency staff was reduced by almost halfand Studentaid.gov The website fell for hours.

“These workforce reductions raise serious questions about the future functionality of federal aid programs,” a student loan expert Elaine Rubin said in an email. “There is a little communication about how the department plans to maintain effective operations and prevent interruptions.”

If the SBA is taking over student loans, it will do so with less resources. The agency announced on Friday that it is shortening your workforce by 43%S

If you are worried about filling out 2025-26 FAFSA “Or you have already sent it- here’s what you need to know.”

Is FAFSA passing?

Even if the Ministry of Education is eliminated, experts do not believe that federal assistance to students or fafsa will disappear.

“The software system and the call center are through contractors, but there is still considerable work done internally,” a student loan expert Mark Kantovitz said in an email. “After FAFSA Fiasco last yearTermination of staff can be a disaster. “

Rubin noted that FAFSA is the “application for trigger” not only for federal financial aid programs, but also for many state and institutional assistance programs.

“It would be a huge endeavor to replace FAFSA, but that doesn’t mean it can’t be at one point,” Rubin said. As a complex network of programs relies on the app, “we don’t really intend to disappear at that time.”

Where else can fafsa go?

Prior to the announcement of Trump on Friday, the most apparent choice for the new FAFSA home was the Ministry of Finance or the Internal Revenue Service, as the FAFSA form is already connected to the IRS system to upload tax return data.

Initially, Kantrowitz told CNET that the Ministry of Finance would be the most common destination for student loan programs. Following Trump’s announcement on Friday, Kantovitz noted that the transfer of student loans and FAFSA to the small business administration would still require congressional approval.

He added that no matter which agency accepts it, the federal government should continue to administer and manage the assistance of students.

“States are not able to handle student loans,” Kantovitz said. “Private creditors have no capacity and appetite for privatizing the federal student loan portfolio.”

If the FAFSA is moving, Kantrowitz said that borrowers may not notice a big difference, depending on who performs the programs.

“Most functions (student loan programs) are performed through contractors,” he said. “SBA lacks experience with the management and collection of student loans. If they transfer the relevant FSA staff and continue to use existing student loan staff, the interruption should be minimal. Otherwise there is potential for significant chaos and confusion among borrowers.”

Should you still send FAFSA?

If you need help to pay a college, experts say you should Continue using FAFSAS The form is used to determine your eligibility for financial assistance, including PELL grants, scholarships, training programs and student loans.

Rubin noted a group of people who have added concerns about completing the FAFSA form: students who have to report information from a parent or spouse who is without documents, an immigrant. Candidates who are not US citizens qualification documentation may be entitled to financial assistance; The condition of financial “associates” as parents and spouses does not affect the admissibility.

Thehe Privacy Law of 1974 prohibits the Agency from sharing a specific identification information without a written consent or an explicit agreement. Under Current AgreementsThe department shares information about FAFSA about candidates – but not associates – with the Ministry of Interior Security to check the status of a candidate. But the aggressive position of this administration against undocumented immigrants has many families who are worried about submitting information that can be shared illegally with immigration authorities, Rubin said.

She has no universal advice for these candidates. “It really has to come to … what is the best for the family and what they are comfortable with.”

What to expect if you have applied your FAFSA application

If you have already sent your FAFSA form, the Ministry of Education says it will process your online application within one to three days (sending on paper forms takes more time).

Once your form is processed, you can enter into Studentaid.gov To see the summary of your submission and make adjustments. However, due to staff cuts, you should expect delays if you have questions or problems with your application, experts have warned.

The summary should include your student assistance index, which the department sends directly to the schools you have listed in your FAFSA form. Schools use your SAI to calculate the amount of financial aid they will offer you. If you are worried that your school has not received your information to determine your financial assistance package, contact your school’s financial aid office.