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Trump says Education Department will no longer oversee student loans, 'special needs'

President Donald Trump continued the unwinding of the U.S. Department of Education on Friday, announcing that the management of the entire federal student loan portfolio and of the department's "special needs" programs would be moved to other federal agencies effective immediately.

Appearing in the Oval Office with Defense Secretary Pete Hegseth, Trump said, "I've decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, a terrific person, will handle all of the student loan portfolio. We have a portfolio that's very large," Trump said.

The federal student loan portfolio – which manages about $1.6 trillion in loans for roughly 43 million borrowers – is currently overseen by the Education Department's office of Federal Student Aid (FSA). That office has been gutted by the recent raft of buyouts, early retirements and last week's broad reduction-in-force .

It was not clear, based on Trump's announcement, how or if the remaining employees and expertise at FSA would be transferred to the Small Business Administration. Trump said he would move student loans "out of the Department of Education immediately" and that Loeffler and her staff are "all set for it. They're waiting for it. It'll be serviced much better than it has in the past.