On Thursday, March 20, President Donald Trump of the US signed an executive order aimed at abolishing the federal Department of Education and “returning authority over education” to state and local levels.
A crucial role of the department is managing federal student financial aid, including grants and student loans. If the Department of Education is dissolved, what implications would that have for the Free Application for Federal Student Aid, or FAFSA?
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During a press briefing on Thursday, press secretary Karoline Leavitt stated that, “when it comes to student loans and Pell Grants, those will still be managed by the Department of Education.” However, the following day, Trump reversed that decision, declaring that the Small Business Administration would oversee the student loan program.
Recent actions by the White House have already diminished the Department of Education — notably, on March 11, nearly half of the agency’s workforce was cut, and the studentaid.gov website experienced hours of downtime.
“These workforce cuts raise critical concerns regarding the future operation of federal aid programs,” remarked student loan expert Elaine Rubin in an email. “There has been minimal communication on how the department intends to maintain effective operations and avoid disruptions.”
If you’re concerned about submitting the 2025-26 FAFSA or have already done so, here’s what you should know.
Is FAFSA going away?
Even if the Department of Education ceases to exist, experts believe that federal student aid and FAFSA are unlikely to vanish.
“The software infrastructure and call center are managed by contractors, but a significant amount of work is still performed internally,” noted student loan expert Mark Kantrowitz in an email. “Given last year’s FAFSA complications, terminating personnel could create major issues.”
Rubin highlighted that FAFSA serves as the “trigger application” not only for federal financial aid programs but also for numerous state and institutional aid initiatives.
“It’s a monumental task to replace the FAFSA, but that doesn’t mean it can’t happen at some point,” Rubin said. Given the intricate network of programs that depend on this application, “we don’t expect FAFSA to disappear anytime soon.”
Where else could FAFSA go?
More than 17 million individuals completed FAFSA during the 2022-2023 cycle.
Prior to Trump’s announcement on Friday, potential new homes for FAFSA included the Treasury Department or the Internal Revenue Service, as the FAFSA form already integrates with the IRS system to retrieve tax return data.
Kantrowitz initially indicated to CNET that the Treasury Department would be the most probable new umbrella for student loan programs. Following Trump’s announcement on Friday, he mentioned that changing oversight for student loans and FAFSA to the Small Business Administration would still necessitate congressional consent.
He further emphasized that no matter which agency assumes control, the federal government must persist in overseeing and managing student aid.
“States are not equipped to manage student loans,” Kantrowitz said. “Private lenders lack the capacity and motivation to privatize the federal student loan portfolio.”
If FAFSA does relocate, Kantrowitz suggested that borrowers may not notice much change, depending on the agency managing the programs.
“Most functions of student loan initiatives are executed through contractors,” he stated. “SBA doesn’t have experience in managing and collecting student loans. If relevant FSA staff were transferred and existing student loan servicers continued to be used, the disruption should be minimal. Otherwise, there is potential for considerable disorder and confusion among borrowers.”
Should you still submit FAFSA?
If you require financial support for college, experts advise you to keep submitting FAFSA. This form is critical for determining your eligibility for various financial aids, including Pell Grants, scholarships, work-study programs, and student loans.
Rubin mentioned a specific group with added concerns about completing the FAFSA: Students who must report information from a parent or spouse who is an undocumented immigrant. Non-US citizen applicants with qualifying documentation may still qualify for financial aid; the immigration status of financial “contributors” like parents and spouses does not affect eligibility.
The Privacy Act of 1974 prevents the agency from sharing certain identifying information without written consent or a formal agreement. Currently, the department shares FAFSA information pertaining to applicants — but not contributors — with the Department of Homeland Security to verify an applicant’s status. However, the administration’s stringent stance against undocumented immigrants has led many families to fear that their information could be improperly shared with immigration authorities, Rubin mentioned.
She does not provide a one-size-fits-all recommendation for these applicants. “It really needs to be based on … what is best for the family and what they feel comfortable with.”
What to expect if you submitted your FAFSA application
If you’ve already submitted your FAFSA, the Department of Education indicates it will process your online application within one to three days (longer for paper submissions).
Once processed, you can log into StudentAid.gov to view your submission summary and make any necessary corrections. However, due to staffing cuts, anticipate potential delays if you encounter questions or issues with your application, experts caution.
Your summary should reflect your Student Aid Index, which the department sends directly to the educational institutions you listed on your FAFSA. Those schools use your SAI to determine the financial aid they will provide you. If you’re concerned that your school hasn’t received the necessary information to calculate your financial aid package, reach out to your school’s financial aid office.
