After we shared our recent post about the possible dismantling of the Department of Education, we got some thoughtful questions from parents—especially about student loans.

One that stood out was this:

“If my loan was set up through the Department of Education, and that department goes away, doesn’t that break the agreement?” 

It’s a great question—and we get why it’s on your mind. So, in this quick follow-up, we’re breaking down what really happens to student loans if the DoE is restructured and whether forgiveness programs and loan terms are still secure.

👀 Spoiler alert: Your loan is still valid, and financial aid isn’t going anywhere.

But let’s walk through why.

First—A Quick Recap 

In our original blog, we explained that the Department of Education was created in 1980, but major programs like Pell Grants and federal student loans were already in place well before then. These programs are governed by laws passed by Congress—not by the department itself.

That means if the DoE is restructured, eliminated, or absorbed into another agency, those laws and aid programs don’t just disappear.

Is It a Breach of Contract if the Department Shuts Down? 

Short answer: 

⛔️ No, it’s not a breach of contract. 

Your student loan was made with the U.S. federal government, not with the Department of Education itself. The Department simply acts as the administrator of those loans. The actual lender is still the federal government.

Even if responsibilities shift to a different agency—like the Small Business Administration, as proposed—that change wouldn’t impact your existing contract.

This kind of administrative reshuffling happens in government all the time.

Your Loan Terms Stay the Same 

Even if another agency takes over loan management, your:

• 📆 Repayment schedule
• 💰 Interest rate
• 🎓 Eligibility for forgiveness or income-driven repayment

…will all stay the same unless Congress makes changes to the law.

Think of it like your mortgage being sold to another company. You still owe the same balance under the same terms—you just send your payment to a different place.

What About Loan Forgiveness Programs? 

Another concern we heard: “Will this impact PSLF or other forgiveness options?” 

Good news: programs like Public Service Loan Forgiveness (PSLF) and income-driven repayment forgiveness are authorized by federal law. The Department of Education manages them right now, but if it’s dissolved, those programs would likely be handed off to another federal agency.

The important part is that unless Congress eliminates the program entirely, it’s still valid—even if a different agency oversees it. 

FAQs: What Else Are Families Asking? 

❓Will my child still be able to get a Pell Grant? 

Yes. Pell Grants have been around since 1972—long before the Department of Education was created. They are part of the Higher Education Act, which is still very much in effect. So even if the DoE changes, the grants should remain available and intact.

❓Does this affect new borrowers or just existing ones? 

Right now, nothing has changed for either group. These are proposals, and they would require Congressional action and time to implement. Even if they go through, the federal government is still the lender, and the programs would likely just be managed by a different agency.

❓Could repayment or forgiveness options change in the future? 

Only if Congress changes the laws—that’s always a possibility—but it’s unrelated to whether the Department of Education exists as a standalone agency. The takeaway? Keep an eye on legislation—not just headlines.

Bottom Line: Don’t Panic 

Yes, it’s a lot of noise. The headlines can be confusing and sometimes downright overwhelming. But here’s what hasn’t changed:

• ✅ Your student loan is still valid
• ✅ Pell Grants and federal student aid aren’t going away
• ✅ Loan forgiveness programs are still in place
• ✅ We’re still here to help you make sense of it all

🧭 Need help planning around loans, grants, or college costs? 

Visit www.gettuitionpaid.com and book a free consultation.

You don’t have to figure this stuff out alone—we’ve got your back.