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The Small Business Administration will lay off 43% of staff, take over federal student loans from dismantled Department of Education
The Small Business Administration (SBA) will now be responsible for handling federal student loans of over 40 million Americans, taking over that responsibility from the Department of Education a day after President Donald Trump signed an executive order to dismantle the education agency. Critics have said this could create chaos and confusion for millions of American borrowers. The announcement comes at the same time the SBA said it is cutting 43% of its staff and restructuring the agency “to eliminate wasteful spending,” as part of the Trump administration’s cost-cutting agenda. “We have a portfolio that is very large, lots of loans, tens of thousands of loans, pretty complicated deal,” President Donald Trump said to reporters at the White House on Friday. “They’re all set for it. They’re waiting for it.” Currently, the U.S. federal education debt exceeds $1.6 trillion, according to CNBC. As CBS News noted, the SBA employs less than half a percent of the entire federal workforce, or roughly 6,500 people. Under the reorganization plan, the agency will eliminate approximately 2,700 jobs, which the agency said would save more than $435 million a year by next fiscal year. The SBA said in a statement that its reorganization will not impact its core services, which include loan guarantees and disaster assistance programs, and field and veteran operations; but it will refocus on supplying capital, fostering innovation, supporting veteran small business owners, and providing timely disaster relief “in support of President Trump’s economic agenda.” However, it is unclear how cutting the SBA’s budget, staff, and programs could benefit American small businesses. According to the statement, Trump’s agenda is aimed at reversing “the broad and costly expansion of the SBA under the Biden Administration.” The Trump administration claims the agency has doubled since the pandemic to help hard-hit small businesses through its programs, including the Green Lender Initiative, the Community Navigator Pilot Program, and DEI activities. “In the last four years, the agency has veered off track – doubling in size and turning into a sprawling leviathan plagued by mission creep, financial mismanagement, and waste,” said SBA Administrator Kelly Loeffler. “Instead of serving small businesses, the SBA served a partisan political agenda – expanding in size, scope, and spending.” A full list of the key features of the SBA’s reorganization can be found here.
The Small Business Administration (SBA) will now be responsible for handling federal student loans of over 40 million Americans, taking over that responsibility from the Department of Education a day after President Donald Trump signed an executive order to dismantle the education agency.
Critics have said this could create chaos and confusion for millions of American borrowers. The announcement comes at the same time the SBA said it is cutting 43% of its staff and restructuring the agency “to eliminate wasteful spending,” as part of the Trump administration’s cost-cutting agenda.
“We have a portfolio that is very large, lots of loans, tens of thousands of loans, pretty complicated deal,” President Donald Trump said to reporters at the White House on Friday. “They’re all set for it. They’re waiting for it.”
Currently, the U.S. federal education debt exceeds $1.6 trillion, according to CNBC.
As CBS News noted, the SBA employs less than half a percent of the entire federal workforce, or roughly 6,500 people. Under the reorganization plan, the agency will eliminate approximately 2,700 jobs, which the agency said would save more than $435 million a year by next fiscal year.
The SBA said in a statement that its reorganization will not impact its core services, which include loan guarantees and disaster assistance programs, and field and veteran operations; but it will refocus on supplying capital, fostering innovation, supporting veteran small business owners, and providing timely disaster relief “in support of President Trump’s economic agenda.”
However, it is unclear how cutting the SBA’s budget, staff, and programs could benefit American small businesses.
According to the statement, Trump’s agenda is aimed at reversing “the broad and costly expansion of the SBA under the Biden Administration.” The Trump administration claims the agency has doubled since the pandemic to help hard-hit small businesses through its programs, including the Green Lender Initiative, the Community Navigator Pilot Program, and DEI activities.
“In the last four years, the agency has veered off track – doubling in size and turning into a sprawling leviathan plagued by mission creep, financial mismanagement, and waste,” said SBA Administrator Kelly Loeffler. “Instead of serving small businesses, the SBA served a partisan political agenda – expanding in size, scope, and spending.”
A full list of the key features of the SBA’s reorganization can be found here.
