Education Secretary Linda McMahon said on Friday, “There’s absolutely no reason, as far as I can determine, that there should be student loans housed in the Department of Education.”
McMahon, who has been tasked by President Donald Trump with winding down the Department of Education, discussed the possibility of moving student loans to the Treasury Department or back to the private sector during an appearance on Breitbart News Daily. The interview comes just one day after Trump signed an executive order calling for the dismantling of the Department of Education.
Host Mike Slater asked McMahon if anyone has made the case that federal involvement in student loans has led to the massive increase in tuition costs, and asked what would happen “if we just eliminated student loans moving forward…”
“Is there any discussion about maybe just eliminating federal-backed student loans in the future?” he queried.
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“Well, I think, certainly, we have to look at it. I’ve had some preliminary conversations with Secretary Bessent at Treasury. There’s absolutely no reason as far as I can determine that there should be student loans housed in the Department of Education — that came in under President Obama. Before that, it was primarily in the private sector,” McMahon replied.
“Yes, I think there’s merit to moving it back to the private sector, but we do have to address — it’s a mind-blowing number that there’s $1.6 trillion outstanding in student loan debt. Almost half of the budget at the Department of Education right now is oversight of that student loan program, and so it’s clearly out of whack,” she continued.
“And as you mentioned, any student that’s borrowing money, colleges give the price of attendance to that student, [and] the student can borrow up to whatever the college says is the cost of attendance. So if it’s $70,000, $90,000,$100,000, the student can borrow that much, but the student may graduate from that college with a degree in philosophy or archeology and might not know that you never could have a job to pay back that loan,” she said.
McMahon also mentioned the idea of studying and revising college applications and modernizing the Free Application for Federal Student Aid (FAFSA) to empower students and parents with more information before borrowing money.
“You could have a red flag that would pop up and say, ‘This loan is too expensive for this particular kind of major, and you really won’t be able to have a sustained income to pay back the loan,’” McMahon said, calling the idea a “goal” but “not something that’s on the drawing board right now.”
“But, those [ideas] are in discussion with more AI and technology coming on board,” she added.
Overall, she said she hopes “that there can be revisions to the student loan program in the private sector or taken over, perhaps, by Treasury.”
“That’s not a foregone conclusion, but it would certainly make sense that by telling colleges and universities that this loan availability will no longer be there, that will be helpful in bringing down the cost of college and universities,” she said.
Breitbart News Daily airs on SiriusXM Patriot 125 from 6:00 a.m. to 9:00 a.m. Eastern.
Katherine Hamilton is a political reporter for Breitbart News. You can follow her on X @thekat_hamilton.
