This article was originally published on Crafting Your Home. A human contributor also wrote and edited the post.
The federal agency that millions of families associate with FAFSA applications, student loans, school grants and education policy could lose many of its biggest responsibilities under a sweeping Republican package advancing through Congress.
U.S. Education Secretary Linda McMahon praised the House Education and Workforce Committee after it approved the 10-bill “Less Bureaucracy, Better Education” package on July 15. The legislation would place major Department of Education programs under five other federal agencies, reshaping how Washington manages everything from Title I school funding to student loan repayment.
McMahon called the committee’s action a major step toward making the federal government “leaner” and more focused on results. She argued that decades of federal education spending have not prevented falling academic performance, growing student debt or a disconnect between education programs and the skills employers need.
The package has not become law. Each bill must still clear the full House, pass the Senate and receive the president’s signature before the proposed transfers can become permanent.
Ten bills would break up major Education Department responsibilities
The legislation is not a single bill closing the Department of Education overnight. Instead, it consists of 10 measures that would divide many of the department’s duties among the departments of Labor, Treasury, State, Interior, and Health and Human Services.
The package covers K-12 education, higher education, federal student aid, career and technical education, tribal education, child care for college students, family engagement, foreign medical school accreditation, international education and universities’ reporting of foreign gifts. Committee Republicans described the legislation as the first congressional step toward permanently establishing changes already pursued through interagency agreements under the Trump administration.
Supporters say the programs would continue, but different agencies would administer them. Employees, records, contracts, property, remaining funds and other resources connected to transferred programs could also move with those responsibilities. The workforce legislation states that transferred money must still be used for the purposes for which Congress originally approved it.
That detail matters because the package is broader than a change in office names. School districts, colleges, nonprofit organizations and state agencies could eventually find themselves dealing with entirely different federal departments when applying for grants, submitting reports or requesting technical help.
Title I and other K-12 programs would move to the Labor Department
One of the most consequential bills is the Less Bureaucracy, Better K-12 Education Act. It would transfer a long list of elementary and secondary education programs from the Department of Education to the Department of Labor.
The list includes Title I funding for schools serving large numbers of students from low-income families. It also covers state assessment grants, migrant education, support for neglected or delinquent youth, teacher-development funding, literacy grants, English-language acquisition programs and Student Support and Academic Enrichment grants.
Programs supporting after-school learning, charter schools, magnet schools, arts education, rural districts and federally connected school systems would also be affected. For local administrators, that could mean a major change in where federal applications are filed, where compliance questions are answered and which agency oversees payments.
Another bill would move career, technical and adult education responsibilities to the Labor Department’s Employment and Training Administration. That transfer would include most programs under the Carl D. Perkins Career and Technical Education Act and adult education programs authorized through the Workforce Innovation and Opportunity Act.
Republicans argue that placing education and job-training programs under one department could create a clearer path from the classroom to the workplace. The proposal is designed to bring school systems, community colleges, workforce agencies and employers into a more unified federal structure.
Student loans would become a Treasury Department responsibility
For college students and borrowers, the most visible change could come through the Less Bureaucracy, Better Student Aid Act. The legislation would transfer major federal student-aid functions to the Treasury Department, including loan servicing and the collection of defaulted and non-defaulted federal student debt.
Those responsibilities include processing payments, managing repayment plans, handling disputes, communicating with borrowers, administering consolidation and reporting loan information to credit agencies. The measure would also move staff and resources connected to the federal student-aid system.
Committee Chairman Tim Walberg said the federal government has mismanaged a student loan portfolio worth about $1.7 trillion and pointed to more than 9 million borrowers in default. He framed the package as a choice between protecting an existing federal structure and trying a different approach focused on students, workers and families.
The transfer would not immediately erase loans, cancel repayment obligations or eliminate financial aid. However, it could eventually change which department supervises loan servicers, answers borrower complaints and makes administrative decisions affecting repayment and eligibility.
For borrowers already navigating repayment changes, forgiveness programs or default resolution, the transition period would be closely watched. Even a well-planned transfer of databases, contracts and employees could create questions about payment records, account access and which office has final authority over individual cases.
Supporters promise efficiency while critics predict confusion.
Walberg said Washington has too often measured success by the growth of government rather than student achievement. Republicans contend that shifting programs to agencies with related missions would reduce duplication while keeping services available to students and schools.
McMahon offered a similar argument, saying the bills would help establish a government that supports educators and families while placing federal responsibilities with agencies considered better equipped to manage them. The administration has already used interagency partnerships to move or share responsibility for selected education functions.
Democrats see a far different outcome. Rep. Robert “Bobby” Scott of Virginia, the committee’s ranking Democrat, said the package would scatter education programs across departments that lack the Education Department’s specialized experience.
Scott argued that the bills do not actually transfer more power or resources to states. Instead, he said, they move federal responsibilities between Washington agencies and could force schools to navigate several systems instead of one. He also cited complaints from states that had difficulty accessing career and adult education funds after earlier administrative changes involving the Labor Department.
Scott noted that the 10 bills do not transfer the Office for Civil Rights or the Office of Special Education and Rehabilitative Services. Those offices oversee protections and services that affect students facing discrimination and many students with disabilities.
What families, educators and borrowers should watch next?
Nothing changes immediately for parents completing school forms, districts applying for Title I grants or borrowers making student loan payments. The package has only cleared the committee stage, where the bills advanced after a series of sharply divided votes.
The next major test will come in the full House. Even if the bills pass there, their future in the Senate could depend on whether Republican leaders can gather enough support for one of the largest federal education reorganizations in decades.
Schools and colleges will also be watching for transition rules. The legislation includes provisions intended to keep existing grants, proceedings, applications and legal agreements in place during transfers, but the practical process of relocating programs could be complicated.
The debate now reaches far beyond the future of one Cabinet department. It raises a larger question for every community that depends on federal education dollars: Would dividing responsibility create a faster, more accountable system, or would families and schools face more doors to knock on when something goes wrong?
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