Ronald Reagan called the Department of Education "Carter's bureaucratic boondoggle" the day it opened its doors.
Democrats blocked every Republican who tried to dismantle it for the next four decades.
But Donald Trump just broke the dam.
The Move Democrats Said Would Never Happen
The Trump administration announced Thursday an interagency agreement transferring student loan operations from the Department of Education to the Treasury Department – the single largest transfer of responsibility in the department's 46-year history.
Andrew Gillen of the Cato Institute didn't mince words about what just happened.
"This student loan move – this is the biggest staffing and the biggest budgetary component of the Department of Education," Gillen told Fox News Digital. "So, if it's sent over to Treasury, this really does indicate that this is moving a substantial portion of the Department of Education elsewhere."
Nicholas Kent, Undersecretary of Education, confirmed it: "Characterizing it as the next and largest step toward winding down the Department of Education is absolutely the right way to think about it."
The department's student loan portfolio sits at nearly $1.7 trillion.
Less than 40% of borrowers are in repayment. Almost 25% are in default.
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Biden spent four years trying to cancel the debt instead of collecting it.
Treasury Secretary Scott Bessent said the deal will "clean up a $1.7 trillion portfolio that has been badly mismanaged for years."
Biden Built the Wreckage Trump Is Now Fixing
Secretary of Education Linda McMahon put it plainly: the department "was never intended to operate what would be the fifth-largest commercial bank in the United States, distributing over $100 billion each year in Federal student loans and grants."
Biden proved it.
His obsession with loan cancellation – blocked repeatedly by the courts – meant borrowers sat in limbo for years while default rates climbed.
The department stopped enforcing repayment. It ran a $1.7 trillion portfolio like a political slush fund.
Now Treasury – with actual financial expertise – takes over.
The plan runs in three phases.
Phase one covers defaulted loans, roughly $180 billion.
Phase two extends Treasury's reach to non-defaulted loans.
Phase three moves the Free Application for Federal Student Aid entirely.
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No timeline has been set for the later phases, but the direction is unmistakable.
Kent says the department has already cut its own size by over 40% and executed ten interagency agreements.
Staff are physically sitting at other agencies.
The proof of concept is working.
What Reagan Tried and Democrats Stopped
Here's the history the media won't tell you.
Reagan called for dismantling the Education Department in his 1982 State of the Union address.
Democrats controlled the House and killed it.
The abolition proposal, as Heritage Foundation researchers documented, "vanished without a trace."
The department was born controversial. Carter created it in 1979 not because America demanded it – but because the National Education Association demanded it, and Carter owed them for the 1976 presidential endorsement.
The bill passed the House by four votes. Four.
Republicans tried again in 1995. Newt Gingrich declared he didn't believe in "federal department of homework checkers." Democrats blocked it.
The 1996 GOP platform called for outright abolition. Democrats blocked it again.
For 44 years, Democrats protected their teachers' union allies inside that building no matter what it cost students or taxpayers.
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Trump is doing it differently. He's not asking Democrats. He's not waiting for congressional votes. He's moving the pieces.
"The Secretary has been on the record saying that these interagency agreements are proof of concept," Kent said. "We want to show Congress, we want to show families, we want to show moms and dads that the Department of Education does not need to be here for federal grant aid and federal student loans to continue flowing to borrowers."
That's the play. Prove it works without the department. Then ask Congress to make it permanent.
This Is the Most Important Domestic Policy Win of Trump's Second Term
Randi Weingarten and the AFT built their political machine inside that department for decades – lobbying for woke curriculum, fighting school choice, protecting failing teachers from accountability.
They're watching their power center get dismantled piece by piece.
Every interagency agreement signed is another argument that the department is redundant. Every successful transfer proves it never needed to exist.
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By the time Congress votes – if it ever does – the work will already be done.
McMahon made the mission explicit: "Cutting through layers of red tape in Washington is one essential piece of our final mission."
Final mission. They're not pretending otherwise.
Reagan talked about it for eight years and got nowhere.
Trump is doing it in year one of his second term.
Sources:
- Joshua Q. Nelson, "Department of Education under Trump just took its 'largest' step closer to shutting down," Fox News, March 23, 2026.
- Andrew Gillen, "Elimination Lost: What happened to abolishing the Department of Education?" Cato Institute.
- "Correcting Carter's Mistake: Removing Cabinet Status from the U.S. Department of Education," The Heritage Foundation.
- "A History of Efforts to End the Department of Education," TIME, February 15, 2025.
- "Treasury Department begins taking over federal student loans from Education Department," PBS News, March 20, 2026.
