Trump Signs Order Aimed at the Department of Education – Potential Impacts on Schools, Students, and the Future of Federal Education

By Bill Ojile, Carrie Schaffer, and Kristen N. Iteen

On March 20, 2025, President Donald Trump signed an executive order initiating the process to dismantle the U.S. Department of Education (DOE) — a historic move that could fundamentally reshape oversight of education in the United States. While the executive order does not immediately eliminate the department, it sets the stage for transferring federal education authority to individual states.

As legal battles unfold, questions remain about how key federal education programs — such as student loans, Title IX protections, and special education funding — will be managed in the absence of a central governing body. Below, we provide an overview of the executive order, the legal challenges ahead, potential impacts on schools and students, and practical steps stakeholders may want to consider to prepare for this unprecedented transition.

Overview of the Executive Order:

The Executive Order on “Improving Education Outcomes by Empowering Parents, States, and Communities,” directs the following:

The executive order directs federal agencies to develop a roadmap for closing the Department of Education and shifting its responsibilities to state governments and other federal agencies. It outlines a phased transition, ensuring that certain programs, such as student loans and Pell Grants, will continue to operate during the process. However, it leaves key questions unanswered, including how funding will be distributed at the state level and what oversight mechanisms will remain in place.

Under the plan, the Office of Management and Budget (OMB) will assess the financial and logistical impact of the transition, while Congress will be responsible for approving the full dissolution of the DOE. Without congressional approval, the department cannot be formally eliminated, which means this executive order could be the beginning of a protracted legal battle.

Potential Challenges to Come:

Dismantling the DOE requires congressional action. While the Republican-controlled House may support the measure, the Senate may be a significant hurdle. With the requirement of a 60-vote supermajority to overcome a filibuster, the chances of full legislative approval remain uncertain. Many lawmakers have already vowed to oppose the move, arguing that eliminating federal oversight could jeopardize educational equity and funding for disadvantaged students.

Legal challenges are also expected. Opponents, including civil rights organizations, teachers’ unions, and state attorneys general, are likely to file lawsuits challenging the executive order and raise issues or questions relating to Title IX, special education, and student loan servicing. These lawsuits could significantly delay or even block the implementation of the order.

One of the biggest uncertainties surrounds the Title IV federal student loan program. Through the Program Participation Agreement DOE imposes regulatory obligations on institutions of higher education under 34 C.F.R. § 668.14(b). It remains unclear whether these regulatory requirements will continue to apply and, if so, which agency will assume enforcement responsibilities. The absence of a clear enforcement authority could create compliance uncertainties for higher education institutions that participate in federal student aid programs.

Additionally, higher education institutions operate under a regulatory triad composed of the DOE, state regulators, and accrediting bodies. Currently, the DOE is responsible for recognizing accrediting organizations under federally prescribed standards. Institutions that wish to participate in the federal student aid program must be accredited by a federally recognized accreditor. However, it is unclear whether accrediting bodies will continue to receive federal recognition, and if not, what role states will play in accreditation oversight under a decentralized regulatory regime.

Another issue involves institutions of higher education with multi-state operations, which could face increased compliance burdens due to differing state regulatory structures. Without a centralized federal framework, institutions that operate in multiple states may be subject to a patchwork of potential more onerous state-specific requirements, increasing administrative complexity and compliance costs.

Furthermore, what impact elimination of the DOE may have on online higher education institutions remains uncertain. The DOE blessed NC-SARA, the voluntary agreement among most states that enables online institutions to operate across state lines without having to comply with individual state licensing requirements. If the DOE is dismantled, it may create uncertainty with respect to the continuation of NC-SARA. If the elimination of the DOE causes states to take a more parochial view of the oversite of higher education, then online institutions may need to navigate unique state-by-state rules, potentially restricting their ability to offer programs nationwide.

Ultimately, the dissolution of the DOE raises critical questions about regulatory enforcement, accreditation standards, compliance obligations, and online education governance. Until Congress and federal agencies provide more clarity, educational institutions will likely face a prolonged period of uncertainty regarding their legal and operational responsibilities.

Impact on Federal Education Programs:

One of the most pressing issues is how federal education programs will function in the absence of the DOE. The department currently manages billions of dollars in federal funding, including Title I aid for low-income schools, special education grants under the Individuals with Disabilities Education Act (IDEA), and funding for school meal programs. Without a clear plan for distributing these funds at the state level, school districts may face uncertainty about their budgets and resources.

Higher education is also at a crossroads. The DOE oversees federal student loans, Pell Grants, and Public Service Loan Forgiveness (PSLF), all of which serve millions of borrowers. The executive order does not clarify how these programs will be managed if the DOE is dismantled. Some proposals suggest shifting student loan administration to the Department of Treasury or privatizing servicing, but such changes could lead to disruptions, delays, and increased borrower costs. Additionally, for-profit colleges could see deregulation, as DOE oversight of fraudulent or predatory institutions would likely be weakened or eliminated.

Title IX enforcement is another area of uncertainty. The DOE plays a key role in enforcing protections against discrimination and sexual harassment in schools and universities. If these responsibilities are transferred to state governments, enforcement could become inconsistent, with some states maintaining strict oversight while others weaken regulations.

How Institutions Can Prepare:

Given the uncertainty surrounding the DOE’s future, educational institutions and borrowers should consider proactive steps to prepare for potential disruptions. Schools and universities should stay informed on policy changes, especially regarding funding and compliance requirements, as oversight responsibilities shift from federal to state agencies. Developing contingency plans for funding may be essential, particularly for institutions that rely heavily on federal aid. Strengthening relationships with state education departments may also be crucial, as they may assume greater authority over education policies and funding distribution.

Employers and advocacy groups may also want to prepare for workforce training and funding shifts. Organizations that benefit from Pell Grants, federal student aid, or workforce development funding should engage in policy discussions and advocacy efforts to ensure continued support for these programs.

President Trump’s executive order to dismantle the Department of Education is one of the most significant shifts in U.S. education policy in decades. However, the final outcome remains uncertain, as legal and political challenges could delay or derail the process. Schools, students, and educational institutions must remain vigilant, preparing for potential changes.

As developments unfold, our firm will continue to monitor the situation and provide updates.

**Any opinions expressed are the authors’, and not necessarily those of the firm or their colleagues.