Student loans to be managed by Small Business Administration, Trump says

President Donald Trump announced Friday that student loans will be moved from the Department of Education to the Small Business Administration.

Trump also said that the Department of Health and Human Services, headed by Health Secretary Robert F. Kennedy Jr., will take over school nutrition programs and "everything else rather complex."

The announcement comes a day after Trump signed an executive order to dismantle the Department of Education, the agency that distributes billions in federal money to colleges and schools and manages the federal student loan portfolio, among other functions. 

U.S. President Donald Trump arrives with Kelly Loeffler (R-GA) at a campaign rally at Dalton Regional Airport January 4, 2021 in Dalton, Georgia. Trump says the Small Business Administration, led by Loeffler, will take over student loans. (Photo by A

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Student loans moving to SBA

What they're saying:

 "We have a portfolio that's very large, lots of loans, tens of thousands of loans," Trump said at an event in the Oval Office with Defense Secretary Pete Hegseth. "Pretty complicated deal, and that's coming out of the Department of Education immediately. And it's going to be headed up by Kelly Loeffler, SBA, and they're all set for it. They're waiting for it. And it'll be serviced much better than it has in the past. It's been a mess."

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"And also Bobby Kennedy, the Health and Human Services will be handling special needs and all of the nutrition programs and everything else rather complex," Trump continued. "So I think that'll work out very well. Those two elements will be taken out of the Department of Education, and then all we have to do is get the students to get guidance from the people that love them and cherish them, including their parents … It's going to be great. It's going to be a great situation."

Trump order aims to dismantle Department of Education

What's next:

Education Secretary Linda McMahon said she is preparing to relocate the department’s core operations to other agencies and roll back federal regulations. In an opinion piece published Friday by Fox News Channel, she said abolishing the department "will not happen tomorrow," but she plans to pave the way.

"We will systematically unwind unnecessary regulations and prepare to reassign the department’s other functions to the states or other agencies," McMahon wrote.

The functions to be reassigned include the distribution of federal money to support low-income students and students with disabilities, the department’s management of student financial aid, civil rights enforcement and data collection, she wrote.

RELATED: USDA cancels $1 billion in funding for schools and food banks to buy food from local suppliers

Eliminating the department altogether would be a cumbersome task, which likely would require an act of Congress.

The backstory:

In the weeks since he took office, the Trump administration already has cut the department's staff in half and overhauled much of the department’s work. Trump adviser Elon Musk’s Department of Government Efficiency has cut dozens of contracts it dismissed as "woke" and wasteful. It gutted the Institute of Education Sciences, which gathers data on the nation’s academic progress.

RELATED: Education Department lays off nearly 50% of its staff: What to know

The agency's main role is financial. Annually, it distributes billions in federal money to colleges and schools and manages the federal student loan portfolio. Closing the department would mean redistributing each of those duties to another agency. The Education Department also plays an important regulatory role in services for students, ranging from those with disabilities to low-income and homeless kids.

Small Business Administration cutting 2,700 jobs

Dig deeper:

The announcement on student loans comes as the Small Business Administration plans to cut its workforce by 43%, or about 2,700 jobs. 

The SBA was established in 1953 to offer resources to small businesses and helps administer small business and disaster recovery loans. It played a crucial role during the pandemic, helping distribute small business aid.  Now the goal is to return to pre-pandemic staffing levels and cut some programs started during the Biden administration, Loeffler, administrator of the Small Business Administration, said. 

"By eliminating non-mission-critical positions and consolidating functions, we will revert to the staffing levels of the last Trump Administration," Loeffler said in a statement.

The SBA said its loan guarantee and disaster assistance programs, as well as its field and veteran operations, won't be affected. The staffing reductions, which will cull 2,700 jobs from the agency's workforce of 6,500, will be a combination of voluntary resignations, the expiration of COVID-era and other term appointments, and some job cuts.

The layoffs at the federal agency are part of a larger campaign by the Trump Administration to shrink the federal workforce, an effort has been led by Elon Musk’s Department of Government Efficiency.