If you’ve been watching the news lately, it probably feels like the floor is falling out from under the American school system. People are talking about "dismantling" and "shuttering," and honestly, it’s a lot to wrap your head around. The Trump Dept of Education isn't just a government agency anymore—it's basically a construction site where the foremen are trying to take the building apart while people are still inside.
But here is the thing: a president can't just walk into a building with a "Closed" sign and lock the front door. Not legally, anyway.
Right now, we are seeing a massive, messy experiment in how to shrink a federal agency without waiting for Congress to give the green light. It’s a strategy of "death by a thousand interagency agreements," and if you have a kid in school or you're staring down a pile of student loans, the changes starting in 2026 are going to hit your wallet and your classroom sooner than you think.
The Big Breakup: Who’s Actually Running the Show?
You might have heard the name Linda McMahon. Yes, the former WWE executive. She was sworn in as the 13th Secretary of Education in March 2025, and her mission has been pretty clear from day one: return education power to the states. But since only Congress can officially "delete" the Department of Education, the administration is doing the next best thing.
They are giving the work away.
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In late 2025 and moving into early 2026, the Trump Dept of Education signed a series of "Interagency Agreements" (IAAs). It’s a bit like a corporate spin-off. Programs that used to live under one roof are being shipped off to other departments:
- Department of Labor (DOL): They are taking over a huge chunk of postsecondary education and workforce development. Starting the week of January 20, 2026, staff from the Higher Education Programs division are being detailed to work at the DOL.
- Department of Interior: They are now in charge of Indian Education programs.
- Health and Human Services (HHS): They’ve taken the lead on foreign medical accreditation and a new child care initiative for student-parents.
- Department of State: They are handling international studies and global exchange programs.
Basically, the "department" is becoming a skeleton crew. The goal is to make the agency so small and its functions so scattered that it eventually just... fades away. Critics like Representative Rosa DeLauro have called this "selling off the department for parts," and they aren't totally wrong. It’s a radical shift.
The "One Big Beautiful Bill" and Your Wallet
If you’re a student or a parent, the most important thing you need to know about is the One Big Beautiful Bill Act (OBBBA). It sounds like a joke, but the impact is very real. This legislation, signed in mid-2025, is the engine behind most of the changes we’re seeing in 2026.
Let’s talk student loans. If you were on the SAVE plan, that’s over. The Trump administration effectively killed it through a settlement in late 2025. Now, the new flagship is the Repayment Assistance Plan (RAP), which is set to launch on July 1, 2026.
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Here is the breakdown of what's changing:
- Lower Borrowing Caps: Starting July 1, 2026, graduate students can no longer borrow up to the full cost of attendance. There’s a new cap: $20,500 per year for most grads, or $50,000 for medical/professional students.
- Parent PLUS Loans: These took a massive hit. Annual borrowing for parents is now capped at $20,000 per student. If your tuition is $60k a year, you’ve got a problem.
- The RAP Plan: It sets payments at 1% to 10% of your income. If you make less than $10,000, you pay $10 a month. Sounds great, right? Well, the catch is that for many middle-income earners, you could end up paying thousands more in total interest over the life of the loan compared to older plans.
Honestly, it’s a bit of a gamble. The administration says this will force colleges to lower tuition because students can’t borrow as much. Whether that actually happens or students just end up in high-interest private loans is the big question nobody has answered yet.
Title IX and the Culture War at School
It wouldn’t be the Trump Dept of Education without a massive shift in civil rights enforcement. In January 2026, the Office for Civil Rights (OCR) launched 18 different investigations into schools across 10 states.
What’s the focus? Women’s sports. The administration is aggressively moving to penalize schools that allow transgender students to compete in sports based on gender identity rather than biological sex. Assistant Secretary Kimberly Richey has been very vocal about this, arguing that these policies discriminate against biological women.
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At the same time, they’ve rolled back Biden-era protections for LGBTQ+ students and returned to a more "adversarial" model for sexual assault hearings on campus. If you’re a student involved in a Title IX case today, it looks a lot more like a courtroom than a school meeting. Cross-examinations are back. Live hearings are back. It's a 180-degree turn from where things were just two years ago.
School Choice: The New "Universal" Reality
The OBBBA also introduced the Educational Choice for Children Act. This isn't exactly a federal voucher—the feds aren't handing you a check—but it’s close. It’s a tax-credit program. Individuals can get a dollar-for-dollar tax credit (up to $1,700) for donating to scholarship organizations.
States have to "opt-in" to this, and by early 2026, many red states are jumping at it. This money can be used for private school tuition, tutoring, or even transportation.
But there’s a catch for the states. As these tax changes kick in, state revenues are starting to dip. Some school districts are already bracing for mid-year budget cuts because the federal money they used to rely on is being redirected or frozen. For example, in late 2025, the administration froze federal child care funds for all 50 states, demanding "additional verification" to prevent fraud. Minnesota, in particular, has been in a legal dogfight with the Dept of Ed over this.
What You Should Actually Do Now
Look, the Trump Dept of Education is moving fast, and waiting for a court to stop it might be a losing game. Here is what you actually need to do to protect your family or your finances:
- Consolidate Parent PLUS Loans Immediately: If you want to get into an Income-Driven Repayment (IDR) plan like the IBR, you generally need to consolidate before July 1, 2026. After that, new Parent PLUS loans are strictly "Standard Repayment" only. No exceptions.
- Check Your State's ESA Status: If you’re considering private school or tutoring, see if your governor has opted into the new federal tax-credit scholarships. In states like Arizona and Arkansas, these programs are exploding.
- Review Your Grad School Budget: If you are starting a master's or PhD program after July 2026, you cannot rely on Grad PLUS loans for everything. You need to look at your school's "Cost of Attendance" vs. the new $20,500 limit. You might need to bridge the gap with savings or private debt.
- Monitor Title IX Policies: If you are a student or athlete, check your school’s updated handbook. Many schools are rewriting their policies right now to avoid federal investigations or lawsuits from the OCR.
The reality of education in 2026 is that the "safety net" is being moved. Whether you think that's a good thing (less federal overreach) or a bad thing (less support for students) doesn't change the fact that the rules of the game have changed. Stay on top of the deadlines, because once July 1st hits, those old options are gone for good.