The Department of Education just did something nobody in Washington thought possible — it started packing its own boxes.
In a move that has bureaucrats reaching for their anxiety meds and teachers’ union bosses spitting out their lattes, the Department of Education announced it’s handing over its massive student loan operations to the Department of the Treasury. That’s right — the agency Jimmy Carter built 45 years ago is now actively dismantling itself, piece by piece, like a government-funded IKEA shelf being taken apart with a vengeance.
The Numbers Don’t Lie (But the Old Guard Sure Did)
Let’s talk about the disaster ED has been sitting on. The federal student loan portfolio stands at nearly $1.7 trillion. Fewer than 40 percent of borrowers are actually repaying their loans. Almost a quarter are in default. The department itself admitted this debt pile is “roughly twice the size of all American university endowments combined and is larger than either our nation’s cumulative credit card debt or cumulative auto debt.”
Read that again. The Department of Education accidentally became the fifth-largest commercial bank in America — distributing over $100 billion a year in loans and grants — and nobody stopped to ask whether a bunch of bureaucrats should be running a financial institution. Spoiler: they shouldn’t have been. And the results prove it.
McMahon Brings the Hammer
Secretary of Education Linda McMahon didn’t sugarcoat the situation. She called the interagency agreement with Treasury a historic step toward “breaking up the Federal education bureaucracy.”
“As the Federal student aid portfolio soars to nearly $1.7 trillion and with nearly a quarter of student loan borrowers in default, Americans know that the Department of Education has failed to effectively manage and deliver these critical programs. By leveraging Treasury’s world-renowned expertise in finance and economic policy, we are confident that American students, borrowers, and taxpayers will finally have functioning programs after decades of mismanagement.”
Treasury Secretary Scott Bessent backed her up, saying the $1.7 trillion portfolio has been “badly mismanaged for years.”
“Treasury has the unique experience, the operational capability, and the financial expertise to bring long overdue financial discipline to the program and be better stewards of taxpayer dollars.”
Translation: the adults are finally taking the checkbook away from the teenagers.
Death by a Thousand Agreements
This Treasury deal is ED’s tenth interagency agreement — tenth — all designed to carve up the bloated education bureaucracy and scatter its functions to agencies that might actually know what they’re doing. Trump didn’t tiptoe around this. He signed the executive order calling for the department’s dismantling, and McMahon has been executing the playbook like a woman who knows her WWE entrance music is playing.
Undersecretary Nicholas Kent laid out the scoreboard on Fox News: “In over a year, we have reduced the size of the department by over 40 percent. We have entered into ten interagency agreements. We have done multiple staff details for other agencies where staff who are in the department are literally physically sitting at other agencies.”
He called it what it is — proof of concept. Show Congress it works, then make it permanent.
The Congressional Question
Here’s where it gets tricky. Officially killing the Department of Education requires an act of Congress, because Congress created the thing in the first place. McMahon knows this. She’s been working the Hill — lunches, breakfasts, phone calls, committee briefings — building the case that this agency has outlived whatever usefulness it once had.
“We need a hard reset in education in this country. That is the president’s directive, and we are working very hard to implement that [and] working with Congress, because it will ultimately take their vote to make these changes permanent.”
And when pressed about the very real threat of a future Democrat administration trying to reinstate all the Biden-era LGBTQ+ and DEI indoctrination nonsense McMahon has worked to eradicate, she didn’t flinch. “That’s why it’s just incredibly important to keep [lawmakers] in the loop and keep them informed.”
Smart. Because executive orders are written in pencil. Legislation is written in ink.
The Bottom Line
For decades, the Department of Education operated like a bloated middleman — skimming power, dodging accountability, and presiding over declining test scores while its budget ballooned. NAEP scores are in the basement. Student debt is in the stratosphere. And the same people who created this mess kept insisting they were the only ones qualified to fix it.
Now the wrecking ball is swinging, one interagency agreement at a time. The bureaucrats who thought their jobs were as permanent as death and taxes just found out there’s a third certainty in Washington — Trump keeps his promises, even the ones the establishment swore were impossible.