Days after nearly half of the Department of Education staff were laid off, President Donald Trump signed an executive order directing the department’s dismantling — a move raising concern over the future of federal student aid and student loans.

The order, titled “Improving Education Outcomes by Empowering Parents, States, and Communities,” does not explicitly call for abolishing the department. Instead, it instructs Education Secretary Linda McMahon to take all lawful steps toward its closure and to return authority over education to state and local governments  while maintaining existing services.

McMahon, former CEO of World Wrestling Entertainment, has acknowledged that neither she nor the president can fully dissolve the department without congressional approval.

Poll Reveals Student Concerns

The executive action follows mass layoffs that sparked confusion over how student aid would be impacted. According to a poll conducted by The Signal, 75.9% of respondents said they were worried about federal aid being cut, while 24.1% said they were not.

The Department of Education currently oversees more than $1.7 trillion in student loans affecting nearly 45 million Americans. In the order, Trump stated, “The Department of Education is not a bank, and it must return bank functions to an entity equipped to serve America’s students.”

During a press conference, Trump announced plans for the Small Business Administration to take over the federal loan portfolio, though no formal transition plan has been released.

The order does not mention eliminating aid programs like Pell Grants. The White House has said such programs will remain in place. However, education leaders and students alike are questioning how the department — or another agency — will manage financial aid distribution without disruption.

A related bill, the States’ Education Reclamation Act of 2025 (H.R. 369), introduced by Rep. David Rouzer, R-N.C., proposes moving federal student aid to the Department of the Treasury.

White House Press Secretary Karoline Leavitt and senior officials have repeatedly stated that student loans, Pell Grants, and Title I funds will be protected.

Restrictions on DEI and Gender-Inclusive Programs

The executive order includes a provision requiring any program or institution receiving federal funds to end practices that promote “Diversity, Equity, and Inclusion” or “gender ideology.” Failure to comply could result in delayed or revoked funding — indirectly affecting student aid availability at non-compliant institutions.

CSU Responds to Federal Changes

CSU Stanislaus President Britt Rios-Ellis responded on behalf of the CSU Chancellor’s Office, “The U.S. Department of Education has been a strong partner in CSU’s mission to expand access, enhance affordability, improve student outcomes, and bring the transformative power of higher education to future generations… We are just starting to review the executive order for potential implications. At this time, we do not have specific information to share.”

The CSU system reaffirmed its commitment to federal and state law. Rios-Ellis added, “Our policies, resources, and support networks are designed to ensure every student can thrive in a safe and affirming environment. The CSU does not discriminate or provide preferences based on race, sex, gender, age, religion, ethnicity, national origin, or military status.”

She did not state whether CSU would resist eliminating DEI or gender-related programs but emphasized the system’s focus on legal compliance.

At the March 25 Academic Senate meeting, CSU leaders discussed ways to integrate DEI values into campus life without explicitly maintaining DEI-labeled programs, as seen in Florida, where schools have renamed such offices to maintain funding under similar restrictions.

To keep student informed, the CSU system has launched a website that tracks changes to federal policy and how those changes could affect CSU campuses.

The site offers weekly and general updates, along with information on CSU’s ongoing support for student financial aid and its commitment to affirming the rights of the LGBTQ+ community.

Financial Aid Offices Offer Reassurance

Rios-Ellis said CSU financial aid offices remain open and fully operational.

“Teams are working hard to assist students with financial aid applications and address their questions. We’re also working closely with the California Student Aid Commission and other education partners to provide support.”

Stan State’s Financial Aid Office also emailed students to reassure them, “We want to assure you that while there may be temporary changes, there are no indications of major disruptions to Pell Grants or federal student loans. The federal government has safeguards in place to ensure continued aid without significant delays.

Although the financial aid office states there will be no major disruption, they continue to monitor the situation and will continue to make statements if any updates are made. Until then, they urge concerned students to make their concerns known.

“If you’re concerned, consider reaching out to your elected representatives to share your thoughts on financial aid”.