WASHINGTON—The U.S. Department of Education and the Department of the Treasury today announced a new partnership that will transform higher education. Crucially, the new plan will accelerate the process of closing the Education Department by shifting all student loan collections and other essential activities the agency can share under law to the Treasury Department.

The new partnership is the most significant effort to streamline student loans since the Higher Education Act was enacted in 1965. Student loans account for two-thirds of the Education Department’s budget, making this collaboration an essential step toward eventually closing the Education Department. This agreement is the 10th interagency agreement between the Education Department and other federal agencies to downsize the agency.  

Heritage Foundation and Heritage Action for America President Dr. Kevin Roberts made the following statement:  

“In a year since President Trump put the U.S. Department of Education on notice with an executive order to close the agency and return education authority to the states, his administration has made good on his plan to finally end this bloated and unnecessary federal agency.  

“For almost 46 years, the Education Department has spent billions of taxpayer dollars while failing to show any measurable improvement for America’s students. Meanwhile, states have made incredible progress, especially in empowering parents to have more options for their children’s education.  

“The administration and Congress should continue to free states and localities from the agency’s federal mandates while maintaining key civil rights protections at the federal level. This will allow education freedom to flourish.”

Jonathan Butcher, acting director of Heritage’s Center for Education Policy, and Will Skillman senior research fellow in education policy, and Madison Marino Doan, a policy analyst, added the following:  

“This is the most significant step that agency officials have taken so far to downsize and ultimately close the Education Department. This is a thoughtful, responsible approach to managing student loans. The college loan system is in complete disarray, largely thanks to President Joe Biden’s administration, and this partnership will bring long-overdue sanity to students and taxpayers.”  

BACKGROUND: For decades, Heritage has called for the dissolution of the Education Department. A 2020 Heritage backgrounder laid out specific recommendations for ending the federal agency, including moving the Office of Federal Student Aid over to the Treasury Department.