How NJ Could Be Affected By Plan To Dismantle Education Department

NEW JERSEY — As President Donald Trump explores ways to dramatically shrink the Education Department budget, questions loom about everything from how New Jersey residents will repay their student loans to how public schools will be funded.

To be clear, an executive order dismantling the Education Department isn’t among the more than 40 that Trump has signed to reshape the federal government — but he quipped to reporters at the White House Tuesday about the first task for Linda McMahon, his nominee for education secretary.

“I want Linda to put herself out of a job,” Trump said.

Trump lacks the full authority to close the agency. Most of its spending — and its very existence — is ordered by Congress. Still, the president has directed his administration to slash spending while pressuring employees to quit.

An executive order in preparation by the White House appears to recognize the limits of the president's power. The planned order would direct his education chief to start winding down the agency but urge Congress to pass a measure abolishing it, sources familiar with the plan told The Associated Press.

Below are some ways New Jersey residents could be affected and other things to know.

What Happens To Student Loans?

One of the Education Department’s functions is underwriting the loans that enable millions of people each year to attend college and graduate school. The agency also manages the approximately $1.6 trillion student loan debt portfolio.

About 42 million people nationwide have federal student loans, including about 1,217,700borrowers in New Jersey. The loans, underwritten by the Education Department, allow millions of people a year to attend college or graduate school. The agency also administers the nation’s $1.6 trillion outstanding education debt.

Borrowers in New Jersey carry an average debt load of $37,201. Statewide, student loan debt is about $45.3 billion, according to an analysis of publicly available data by Education Data Initiative researchers.

Even if the Education Department were eliminated, borrowers would still have to repay their loans, Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit that helps borrowers navigate the repayment of their debt, told NBC News.

The most logical agency to assume management of the debt portfolio would be the Treasury Department, Mayotte said.

Or, the Justice Department or Department of Labor could carry out some Education Department functions, according to a blog post by The National Association of Student Financial Aid Administrators.

Another alternative is privatization of the federal student loan system, which some Republicans have proposed.

“The anxiety levels are pretty high for borrowers right now,” Betsy Mayotte told NBC.

What Happens To Public Schools?

Most public school funding comes from the local level, with the federal government providing an average 13.6 percent of the funding for public K-12 education nationwide in the 2021-2022 school year according to an analysis by USA Facts of National Center for Education Statistics data.

About 7.7 percent of public school funding in New Jersey comes from the federal government.

Gutting federal funding for public schools would hurt some states worse than others, Kevin Welner, the director of the National Education Policy Center, told Axios.

States with larger numbers of lower-income families that receive higher shares of Title I funding would be hurt the worst, Welner said, noting they “don’t have the same capacity to step in and make up that difference.”

“In wealthier states, we would probably see some reduced spending for students and some increased state allocations,” he said. “In states that are already financially strained, because they just have less wealth, this could result simply in less funding and fewer resources for the students.”

Becky Pringle, the president of National Education Association, said in a post on Blue Sky that students would be directly harmed.

“It will drain resources from the most vulnerable, skyrocket class sizes, make higher ed more expensive, strip special ed services, and gut student civil rights protections,” Pringle said. “We won't let this happen.”

How Are States Reacting?

Trump’s comments at his press conference Tuesday raised alarms among schools and states that rely on federal money.

In late January, several New Jersey superintendents testified in front of the Joint Committee on the Public Schools about the impact that lost funding would have on free and reduced lunch programs, and high-impact tutoring programs to help with learning loss.

“Without these programs, disparities in academic achievement would likely grow,” said Manville Assistant Superintendent Kelli Eppley, as quoted in the New Jersey Monitor.

In Minnesota, Democrats in the state assembly warned about the potential impact on their state. Sen. Mary Kunesh said she was worried the order could disrupt funding and called for more clarity on the plan.

“Imagine if we have billions of dollars frozen at the federal level,” Kunesh said at a news conference. “How are we going to make sure they have the curriculum they have to learn?”

Some Republicans in Minnesota's Legislature said there was no reason to panic without full details of the order.

Those details are expected to be sorted out by Trump's education chief, and the president didn't immediately say whether he would look to preserve the department's core work.

What Happens Next?

Trump campaigned on a pledge to close the department, saying it has been infiltrated by “radicals, zealots and Marxists.” In the nearly five decades since the agency was created, conservatives have made occasional attempts to shut it down, with critics saying it wastes taxpayer money and inserts the federal government into local education decisions.

Trump is expected to give his education chief a deadline to deliver a plan for the agency's wind down. Yet even some of his allies question how far he can go without Congress. Some of the department’s most significant programs are required by federal legislation, including Title I money for low-income schools and federal student loans.

What Trump can actually do to cut spending could be limited to tiny fractions of the budget, according to one source with knowledge of the plan. It would hardly dent the department's $79 billion annual budget.
The sources spoke on the condition of anonymity because they weren't authorized to discuss the plan publicly.

Getting support from Congress would provide another test of Trump's sway. Some Republicans have raised doubts about the popularity of closing the department or slashing its programs, which support Republican and Democratic states alike.

The Associated Press contributed reporting.