WASHINGTON: U.S. President Donald Trump announced on Friday that critical programs handled by the Education Department for student loans and nutrition would be transferred to other departments as part of his effort to shutter the agency.

Trump, who signed an executive order on Thursday aimed at dismantling the Education Department, told reporters in the Oval Office that its student loans portfolio would be handled by the Small Business Administration. Special needs and nutrition programs would be administered by the Department of Health and Human Services, he said.

“We have a portfolio that’s very large, lots of loans, tens of thousands of loans,“ Trump said. “That’s coming out of the Department of Education immediately, and it’s going to be headed up by (SBA Administrator) Kelly Loeffler.”

The Education Department managed more than $1.6 trillion in student loans for some 44 million recipients as of 2023. White House spokeswoman Karoline Leavitt said on Thursday that the department would continue to manage student loans and Pell Grants, which are designed to help low-income students. Trump’s announcement represents a shift from that stance.

Trump, who came into office in January, has spent the last two months reshaping the U.S. government, gutting the federal workforce and implementing a sweeping conservative agenda.

Targeting the Education Department has been at the top of that agenda’s list.

The Republican president cannot succeed in fully closing the department without congressional backing, and he does not have the needed Democratic votes to do so. But by moving some of its major programs to other government agencies and firing half of its staff, his administration is helping to achieve his goal, with cheers by conservatives, to reduce it to a shell.

Democrats and liberal advocates for the department say it provides critical services to students and strengthens civil rights.

The White House says the department is a waste of money and cites bad test scores and literacy rates among children as proof that the agency has not been effective.

The conservative government blueprint known as “Project 2025,“ which Trump publicly disavowed as a presidential candidate but has followed in many ways since coming into office, suggested moving programs out of the Education Department to other agencies in an effort to close it.

SBA Administrator Loeffler welcomed Trump’s latest move.

“The SBA stands ready to take the lead on restoring accountability and integrity to America’s student loan portfolio,“ she said in a post on X.

The SBA announced on Friday that it was reducing its own workforce by 43%.

James Kvaal, who served as under secretary of education in the Biden administration, said borrowers could feel a pinch from the shift in loan administration. Millions of borrowers are late on their payments and many will default this fall, he said, describing that as bad news for them and taxpayers. “Cutting the staff in half – and transferring the work to a wholly new agency – is a massive workload burden just when vulnerable borrowers need help the most,“ Kvaal said.

The White House said it was seeking to dismantle the department “while safeguarding critical functions for students and families such as student loans, special needs programs, and nutrition programs.” It did not comment specifically on the potential impact on borrowers.

Trump said the Health and Human Services Department, overseen by Secretary Robert F. Kennedy, Jr., would administer special needs and nutrition programs.

“Those two elements will be taken out of the Department of Education, and then all we have to do is get the students to get guidance from the people that love them and cherish them, including their parents … along with the boards and the governors and the states,“ Trump said.