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Daily Hackly > Blog > Money & Smart Living > Understanding the Impact of the Department of Education’s Closure on FAFSA Applications
Money & Smart Living

Understanding the Impact of the Department of Education’s Closure on FAFSA Applications

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Last updated: April 14, 2025 8:15 pm
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Understanding the Impact of the Department of Education’s Closure on FAFSA Applications
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Impact of Potential Education Department Changes on Students

During his election campaign, Trump, along with his supporters, declared their intention to eliminate the Department of Education—an objective that has fueled Republican campaigns for years. A Senate candidate was quoted suggesting the agency should be “thrown in the trash.” Another candidate criticized it by labeling it “one of the worst monstrosities ever created.”

Should the Department of Education be dismantled, it could jeopardize billions of dollars in funding, scholarships, and grants that currently support millions of K-12 and college students across the United States. This article delves into the implications of Trump’s stance on the Department of Education (DoE) and its potential effects on students.

Implications for FAFSA

At present, the Department of Education oversees a staggering $1.5 trillion in student loans for more than 40 million borrowers. If this department is disbanded, the Free Application for Federal Student Aid (FAFSA), which serves as a crucial gateway for countless students seeking financial support, would require reassignment to another federal entity.

This transition could result in disruptions to the established financial aid application process, ongoing uncertainty regarding which agency would assume responsibility for student loan management, and general bureaucratic confusion surrounding the reassignment of these responsibilities.

Other forms of financial aid could also suffer. For instance, Pell Grants, which provide essential need-based financial assistance to low-income students, might undergo substantial changes. Administration of these grants shifting to a different agency could cause delays in fund distribution, alterations in eligibility standards, and increased administrative costs.

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