Last March, there was considerable excitement about eliminating the US Department of Education. As well there should have been. Since the department was born in 1980, it has taken taxpayer money, burned a bunch of it in bureaucracy, and sent the remains back to states, districts, and schools with strings attached. It has had no clear, sustained, positive effect on educational outcomes, and it has long bungled running student loans. It is also unconstitutional: the Constitution gives the federal government only specific, enumerated powers, and authority to govern in education is not among them.

Despite the worthiness of the cause, the energy behind it eventually subsided. Budget impasses, war, and immigration policy dominated headlines, and downsizing efforts got bogged down in court battles. Also, the Trump administration has said that ultimately, Congress, which created the department, would have to eliminate it. The administration has greatly downsized department staffing and is moving daily operations of several parts to other agencies, but the department and the programs it runs remain.

With national attention on ending the department waning and developments around the effort proliferating, it is easy to lose track of what is happening. I have written occasional updates on the status of department elimination, but it seems like the topic could use regular status reports. That is what “End Fed Ed Watch” will provide. On the second Tuesday of each month, if anything new has happened in Congress, the administration, or courts over the previous month, I will update the sections below. If nothing new has occurred, I will indicate no change. I will also include new Cato analyses on the subject.

Congress

There are currently six bills to eliminate the department:

The appropriations bill passed last week ignored the Trump administration’s proposal to cut the Education Department’s budget by $12 billion, instead increasing it by $217 million. It also contains language that could be interpreted as prohibiting interagency agreements (IAAs) to move daily responsibility for programs out of Education into departments such as Health and Human Services. Such an interpretation appears to be incorrect. Sec. 512 seems to prohibit simply transferring money from Education to other agencies but not moving money to another agency to handle the daily administration of programs, with Education ultimately in charge. Sec. 514 suggests that Education need only consult with the House and Senate appropriations committees within 15 days of executing IAAs and provide written notice within 10 days.

The Administration

The Trump administration continues to promote eliminating the Education Department and returning control of education to the states, and is moving responsibilities via IAA. It has also encouraged states to seek greater flexibility in the use of federal funds and accountability mechanisms under existing law. So far, Iowa has been granted greater funding flexibility, and several other states have applied for various waivers.

On the flip side, the department is heavily involved in civil rights actions against colleges and school districts and is promoting conservative-leaning history and civics teaching. The administration has also hailed increases in federal funding for charter schools and created a “compact” to get colleges to trade autonomy for federal funding.

Importantly, civil rights enforcement is a constitutional responsibility of the federal government, but the administration has appeared to exceed that with such demands as ideological balance on college faculties.

Courts

The following are cases directly related to the Trump administration’s efforts to downsize or eliminate the Department of Education:

Cato Work

Cato Center for Educational Freedom scholars continually make the case for ending the Department of Education and most federal involvement in education. What follows is work from the previous month:

• “Cutting Federal Aid for K‑12 Education”: A major update of the K‑12 education page at Cato’s Downsizing Government. It includes the latest developments in federal K‑12 policy, a lot of history, spending data, and lays out mediocre, corresponding academic performance. It also explains the value of federalism in education.
• “The Trans Athlete Question Requires Subsidiarity. The Trump Administration Just Did the Opposite”: This Cato@Liberty post examines a way in which the Trump administration is moving away from devolving power: transgender athlete rules.

Going Forward

While the goal of End Fed Ed Watch is to capture all the latest developments on eliminating the Department of Education, we may miss some. If you are aware of anything missing or incorrect, please contact Center for Educational Freedom Director Neal McCluskey at nmccluskey@​cato.​org. 

Fraud in federal programs has become a hot topic lately, and federal student aid is no exception. Indeed, it seems to be a big, glowing target for fraud.

ABC News has reported on massive fraud in community college enrollment. It says that “in California alone, nearly a third of all community college applicants in 2024 were identified as fraudulent.” For some schools, it was maybe even worse than that:

Gina Macklin, a senior administrator at Delaware County Community College, told WPVI-TV in Philadelphia that the school found more than 500 fake students enrolled in its classes in 2023, which she described as “a terrible year” for the school, not least of which because those fraudsters “had taken seats from legitimate students.”

Dr. Beatriz Chaidez, the chancellor of the San Jose Evergreen Community College District, told KGO-TV in San Francisco that at one point, a 50-person online class was booked in minutes and had 100 individuals on its waitlist. The school later learned that just six of those “students” were real people trying to get an education.

Basically, scammers enroll fake students, especially in online classes, and the money starts flowing. The ABC report states that “over the past five years, the federal government has investigated more than $350 million in fraud perpetrated by ‘ghost student’ schemes.” In December, the US Department of Education reported that in less than a year it had stopped more than $1 billion in attempted student aid fraud.

As Chris Edwards has written about federal aid-to-state programs, when someone is getting money from the federal government—money taken from taxpayers—they have limited incentive to make sure it is used responsibly. And because federal bureaucracies are sprawling and, unlike the states, Washington does not have to balance its budget, the worst place to provide “help” is at the federal level.

Of course, the most painful effect of federal third-party funding in higher ed is on prices. Federal aid enables colleges to raise prices and bring in more money, and it often incentivizes students to demand more expensive options that have little to do with education. Oh, and funding more and more degrees artificially inflates demand for credentials in the workforce.

Basically, federal student aid fuels tuition inflation, credential inflation, and fraud. It is also unconstitutional … and time for it to end. 

On January 16, the US Department of Education announced that it will delay the collection of defaulted federal student debt via wage garnishment and retention of federal funds such as Social Security payments. The reasons offered by the Trump administration are that the Biden administration left student debt repayment a confused mess that needs to be clarified before forced collection resumes, and the Working Families Tax Cuts Act—aka One Big Beautiful Bill—will simplify debt repayment starting this July, as well as allow a second chance for defaulted borrowers to rehabilitate their loans.

This makes some sense. Federal student lending is, indeed, perplexing, which was made worse by President Biden’s unconstitutional debt cancellation proclamation and efforts to unilaterally transform repayment. There are currently seven repayment plans that are due to be reduced to two in July. In an ideal lending world, granting leeway for a lender’s mistakes, and as better repayment options come on line, could be reasonable.

But federal student loans are not an ideal lending world. They are loans made in a political world using money taken from taxpayers, whether they wanted to lend or not.

Because these are government loans, the first thing to determine is whether the law allows the education secretary to delay involuntary repayment. It appears to. Wage garnishment falls under the Higher Education Act, which says that the Secretary of Education may—not shall—garnish wages to collect on unpaid debts, so the administration probably can legally delay such collection or not use it at all. The Debt Collections Improvement Act says that agency leaders “shall try to collect a claim of the United States Government for money or property arising out of the activities of, or referred to, the agency.” But it also says leaders “may compromise a claim of the government of not more than $100,000,” suggesting the education secretary could implement measures short of retaining funds for many borrowers.

Even if legal, there is a huge problem with another delay: It will likely bolster the deleterious sentiment among borrowers for which the Trump administration blamed Biden. “Why bother putting a lot of effort into repaying?” many borrowers will likely ask. “The feds will never really demand it.”

Political reality also makes it quite possible that the delay, if not stopped now, will become permanent. The Education Department’s statement suggested that collection would resume after new repayment simplification came online in July, but it included no concrete end date for the moratorium. And during COVID-19, we saw repayment delay after delay after delay, with excuse after excuse for why borrowers could not restart what they were always supposed to be doing: repaying their loans.

The political incentives to continually defer repayment are potent. Borrowers have strong incentives to fight politically for what they want—continued non-repayment—because it has a big impact on them. For taxpayers who are not getting repaid, in contrast, student loan losses are just one among thousands of ways the feds drain their wallets. The concentrated benefits to borrowers and diffuse costs for taxpayers make policymakers’ incentives to respond to borrowers stronger than to get taxpayer dollars back.

Given the political incentives and practical experience, it seems unlikely that allowing a delay will ultimately result in taxpayers getting their money returned, even if the arguments for a delay make some intuitive sense.

Going deeper than the question of repayment, everyone should see this mess for what it is: more evidence that the federal government should not be involved in student lending. The programs:

• disburse billions of dollars to borrowers who are unlikely to complete programs with good employment and pay prospects, resulting in mass defaults
• fuel rampant price and credential inflation
• are unconstitutional

Private lenders, risking their own money, might well decide that the best business decision is to get their own house in order and simplify customer options before using forceful, last-ditch debt-collection efforts. But the federal government is not a private lender risking its own money. It is risking yours, and should not delay in getting you repaid.

The Trump administration has announced that the US Department of Education (DoED) is sending day-to-day responsibility over several of its functions to other departments. This is a small step in the right direction—DoED must end. But it is crucial not to lose sight of the much bigger, ultimate goal: ending all unconstitutional and unproductive federal meddling in education.

What Do We Get from Shipping DoED’s Parts Elsewhere?

The US Department of Education is unconstitutional. The Constitution gives the federal government only specific, enumerated powers, and authority over education is nowhere among them. Not only does the department run numerous unconstitutional programs, it is also a cabinet-level department, giving the secretary of education direct access to the president. Before the department’s creation in 1979, most federal education functions were housed in an office within the Department of Health, Education, and Welfare. The National Education Association, the nation’s largest teacher union, fought for the department’s creation to wield greater influence.

Dismantling DoED but keeping its functions in other departments would eliminate this direct presidential access, lower the profile of the person in charge of federal education programs by reducing them below secretary level, and bolster the symbolically crucial point that constitutionally, the federal government should not be in education. It would also dismantle a mismanaged agency that has failed to complete audits for the last three years, in part due to its infamous mishandling of its biggest responsibility: college student financial aid.

DoED also has had little discernable positive effect on educational outcomes, at least as measured by the federal government’s own National Assessment of Educational Progress. The chart below shows changes in the percentage of high school seniors hitting “proficiency” or surpassing a middle benchmark—depending on the test—as well as percentage changes in real total and federal spending per pupil since the department’s birth in 1980. Performance is basically stagnant, while spending is appreciably higher.

Importantly, many things affect standardized test scores, and such scores are hardly the end all, be all of education. It is also not clear how much higher academic achievement should be per additional dollar spent. Finally, moving federal programs to new departments might not improve matters, though it would be difficult to do much worse.

What Do We Get from Shipping Parts Elsewhere with Interagency Agreements?

The Trump administration made a trade-off in how it sent off the parts of the department. By using interagency agreements, the administration was able to move big parts, possibly without breaking the law. Several statutes appear to allow the Education Department, essentially, to contract with other agencies to provide resources or services, with DoED maintaining ultimate responsibility for the function. There might be a question of how much can be transferred by interagency agreement, but this move seems less likely to be overturned by a court than an outright transfer.

Are the Parts Being Shipped to the Right Places?

All of the moves are logical, with the proviso that most of these jobs should not exist at all:

• Elementary and Secondary Education to the Department of Labor: A major purpose of education is to give students skills and knowledge to be productive workers. This can be done by entering college, or career and technical education options in K‑12. These functions could have also gone to Health and Human Services, which deals with child welfare and was basically the old home of education.
• Postsecondary Education to Labor: These programs, which largely fund institutions of higher education, not students, also make logical sense in the Department of Labor. For the vast majority of people who go to college, a top goal is to get a job. It also makes sense to keep higher education with K‑12.
• Indian Education to the Department of the Interior: Interior already runs the Bureau of Indian Education. It is logical to locate all Indian education functions in the department that has primary responsibility for working with Native Americans.
• Foreign Medical Accreditation to the Department of Health and Human Services: “Health” is the first word in Health and Human Services. It makes sense to place a job of determining if doctors from other countries are qualified to practice medicine in the United States at the department.
• Childcare Access Means Parents in School to Health and Human Services: This program is focused on providing childcare for college students with children. It is logical that the department that houses Head Start—the primary federal early childhood program—would handle this.
• International Education and Foreign Language Studies to the State Department: Programs focused internationally are clearly in the State Department’s wheelhouse.

What Else Could Have Moved?

Everything could be moved, but here are a couple of big ones currently staying put:

• Federal Student Aid: The biggest part of the Department of Education, oversees student loans, Pell Grants, and Work Study. It could have been moved to the Treasury Department, which already has a role in collecting student loans, or the Small Business Administration, though it is not as well-situated to handle student loans as Treasury.
• Office for Civil Rights: This could have moved to the Department of Justice, which has primary responsibility for civil rights enforcement and has an existing education section.

What Will the Savings Be?

Moving day-to-day responsibility over these functions will probably not achieve appreciable savings by streamlining bureaucracy. The programs are not supposed to change in terms of what they do or their reporting requirements.

What Needs to Be Done?

Eliminating the Department of Education is important, and the Trump administration’s moves get us a little closer by reducing DoED’s footprint. But until whole programs and functions are eliminated, moving them is largely rearranging Titanic deck chairs; money will continue to be wasted and bureaucracy maintained. Based on constitutionality—“what is the federal government authorized to do?”—the following is all that should remain among current DoED’s responsibilities, along with where they should probably reside:

• Civil Rights Enforcement: Under the 14th Amendment the federal government is charged with stopping state and local government discrimination in their provision of education. Again, this should go to the Department of Justice.
• Indian Education: Through the treaty power, the federal government has authority to work with Indian tribes. Again, Interior.
• Impact Aid: This is funding to compensate school districts that have federal lands in their boundaries, such as military bases, which often include children and cannot be taxed. It is arguably constitutional under defense or territory provisions in the Constitution. It could go under Interior or the Department of Defense.
• The District of Columbia Opportunity Scholarship Program: This private school choice program serves families in DC, over which the federal government has exclusive jurisdiction. This could go to Treasury or Health and Human Services.
• Gallaudet and Howard Universities: Both are in the District of Columbia and funding could come through Treasury or Health and Human Services.

Everything other than the above Department of Education functions should be phased out by Congress, perhaps over four years to allow schools and families to adjust. The Constitution, and truly returning power to the people and states, demands it.

This afternoon the Trump administration announced its latest move to dismantle the US Department of Education. As I have explained for decades, the department is unconstitutional, unhelpful, and needs to go. How close does today’s action get us to where we need to go?

It goes in the right direction. Basically, it sends day-to-day work in six areas out of the Education Department and puts it in other agencies:

• Elementary and Secondary Education to the Department of Labor
• Postsecondary Education to Labor
• Indian Education to the Department of the Interior
• Foreign Medical Accreditation to the Department of Health and Human Services
• Child Care Access Means Parents in School to Health and Human Services
• International Education and Foreign Language Studies to the State Department

This is a hot take because each one of these moves has more details than the basic transfer, details I still have to dive into. But the idea of moving Education Department functions elsewhere makes sense, especially things like Indian education to the Interior Department, which already houses the Bureau of Indian Education.

The moves also appear to adhere to the Constitution and the law. There is, of course, an argument that the department is unconstitutional and, hence, the president could refuse to operate it. But the administration has not made that argument, saying that ultimately Congress, which is the legislative body, created the department, gave it many of its jobs, and must act to eliminate it. With that in mind, the administration is not flat-out eliminating functions but is creating interagency agreements that leave the Education Department in charge but give regular operations to other agencies. No doubt the legality of this will be tested—there will almost certainly be lawsuits—but there does seem to be substantial leeway for the Secretary of Education to enter into partnerships with other executive departments.

Of course, this is not the same as ending the Department of Education or federal education intervention. The Education Department still retains many functions, most notably administering college student aid, and is still officially responsible for all of the operations that it is, essentially, contracting out. So bureaucracy will remain, and the Constitution will continue to be violated.

There is much more work to be done. 

On October 30, the US Department of Education published new regulations governing Public Service Loan Forgiveness (PSLF), a program created in 2007 that cancels a borrower’s remaining federal student debt after ten years of repayment for those who work for a “public service” employer, generally defined as government or a non-profit entity. The idea is to reward people who work for the “public good.” But as the Trump administration is likely to make clear going forward, one person’s “public good” might be someone else’s “public really bad,” and it is dangerous to let the federal government—heck, just the executive branch—decide who gets special treatment based on something so subjective—and politically loaded.

Before getting into the details of the Trump regulations, make no mistake that Public Service Loan Forgiveness inherently makes a dubious judgement about who is more virtuous, lionizing those who work for putatively nonprofit entities—especially government—despite for-profit employers furnishing crucial stuff ranging from food to computers, and people such as doctors at nonprofit hospitals likely being no more selfless than those at for-profit.

As unhelpful as the distinction between employment by nonprofit and for-profit entities is, it is probably not as dangerous as deciding who serves the public good and who subverts it. And the Trump order is very much about subversion. Going forward, it would make employment by organizations deemed to be involved in any of the following, with a “substantial illegal purpose,” ineligible for loan forgiveness:

• aiding and abetting violations of Federal immigration laws
• supporting terrorism or engaging in violence for the purpose of obstructing or influencing Federal Government policy
• engaging in the chemical and surgical castration or mutilation of children in violation of Federal or State law
• engaging in the trafficking of children to States for purposes of emancipation from their lawful parents in violation of Federal or State law
• engaging in a pattern of aiding and abetting illegal discrimination
• engaging in a pattern of violating State laws

A lot of these provisions specifically mention breaking laws. That might seem clear-cut, but there is subjectivity here, as the Secretary of Education decides which employers have run afoul of the law, doing so using only a preponderance of evidence standard. Basically, a 50 percent-or-greater certainty standard, and there is no way to prove that a secretary is slightly more than 50 percent sure of anything.

It is not difficult to imagine how this could play out. Are you a nonprofit employer with diversity, equity, and inclusion policies? Sorry, that violates the administration’s interpretation of the Civil Rights Act of 1964. Do you support sanctuary cities for immigrants? That breaks immigration law. Does the employer strongly support Palestine? Disqualified for supporting terrorism.

Employers who are cut off will be able to sue and possibly win, but to a large extent, the process will be the punishment, requiring significant employer time and money to fight the federal government, which defends itself with taxpayer dollars. And while letting a presidential administration decide which employers are worthy of conferring loan forgiveness on their employees is dangerous and unconstitutional under any administration, conservatives should, as always, remember that a future progressive administration could use this power against them. 

President Sanders or Ocasio-Cortez could designate nonprofit employers, including school districts, that prohibit bathroom and locker room choice for transgender students as violating civil rights law or could cut off organizations they decide do not hire enough members of racial minority groups.

PSLF is a terrible policy all around. It favors one type of employee over another, fuels college price inflation, enables the executive branch to make political judgments about who serves the nebulous “public good,” and violates the Constitution, which gives the feds no authority to engage in college student lending to begin with. It needs to end. 

School choice reforms are spreading across the nation. Governments in 33 states are now providing financial support for private schooling through 80 different programs, as shown in this figure from EdChoice. About one million students are benefiting from these reforms.

Cato’s Neal McCluskey has been particularly supportive of reforms based on education savings accounts (ESAs). A number of states have now made eligibility for their ESAs universal or near universal. Recent reports in Arizona and Iowa illustrate the cost savings possible compared to traditional public schools. Glenn Farley of the Common Sense Institute reports on Arizona’s Empowerment Scholarship Accounts, and Martin Lueken of EdChoice reports on Iowa’s ESAs.

Here are my thoughts based on their analyses.

Spending on choice programs represents a small share of overall school spending even in leading reform states. Arizona’s ESA program enrolled 77,571 students this year at a cost of $759 million, which is about 5 percent of public school spending in the state. Iowa’s ESA program enrolled 16,757 students, costing $124.2 million, which was less than 2 percent of public school spending in the state.

As choice programs grow, states should reduce funding for public schools that have declining pupil counts. Taxpayers should enjoy savings because the average per-pupil costs of choice programs are substantially less than the costs of public schools.

In Arizona, the average per-pupil ESA funding is $9,785, but if the type of student in the ESA program was the same as the average student in public schools, it would be $7,111. That figure compares to $13,541 for average public school costs in the state.

In Iowa, the average per pupil ESA funding is $7,413, which compares to $15,283 for the average public school costs in the state.

Will ESAs reduce the overall costs of K–12 education? Yes, but we need to consider that some ESA pupils had been in private schools paid for privately, although most are switchers from public schools. We also need to consider that some public school costs are fixed in the near term, although they can be cut in the longer term as public school enrollment falls. Lueken examined these factors for Iowa and estimated that the 2023–2024 cohort of 16,757 ESA students will save taxpayers a net $55 million a year. As the share of Iowa students using ESAs rises, the taxpayer savings will increase.

The main goal of school choice reforms is to improve education quality through competition and innovation. McCluskey further argues that choice programs allow support for education to be structured in a way that treats families with differing values and needs equally. But with the nation’s total public spending on K–12 about $900 billion a year, the cost savings from school choice are another major advantage.

Read more of McCluskey’s work on school choice: “A Bright Spot for Sure: Educational Freedom in 2023,” “School Choice Arguments For and Against,” and “Survey: 46 Percent of Private Schools See Enrollment Rise.”