The Honorable Donald J. Trump, President of the United States (April 11th, 2025)

Summary

Nydia M. Velázquez, writing as Ranking Member of the House Small Business Committee, urges President Trump and Linda McMahon, Secretary of Education to abandon a proposal to transfer the Department of Education's $1.6 trillion federal student loan portfolio to the Small Business Administration (SBA), calling it deeply misguided and potentially unlawful. The letter says reassigning the portfolio without congressional authorization raises serious legal concerns and cites a 43% cut to SBA staff capacity under Executive Order 14210. It asks for answers by April 21, 2025, on the effects of the workforce reduction, staff training or transfer of Education Department staff, and the expected timeline.

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                                                  April 11th, 2025
The Honorable Donald J. Trump
President of the United States
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500

The Honorable Linda McMahon
Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, D.C. 20202

Dear President Trump and Secretary McMahon:

I write to express deep concerns regarding recent reports that the administration is actively working to transfer
the Department of Education's $1.6 trillion federal student loan portfolio to the Small Business Administration
(SBA). As Ranking Member of the House Small Business Committee, I urge you to abandon this deeply
misguided and potentially unlawful proposal.

The federal student loan system is critical in ensuring access to higher education for millions of Americans. The
Department of Education, through the Office of Federal Student Aid (FSA), has developed the expertise,
infrastructure, and oversight mechanisms necessary to manage these complex financial instruments and the
borrowers they serve. Transferring this massive responsibility to the SBA, which is tasked with administrating
disaster recovery loans and offering other critical resources to American small businesses would jeopardize the
consistent management of federal student loans and borrower forgiveness programs.

Equally concerning is the suggestion that this move could be implemented unilaterally by the Executive Branch.
Reassigning such a significant portfolio without congressional authorization raises serious legal concerns.
Congress has designated the Department of Education as the agency responsible for administering federal student
loans through the Higher Education Act of 1965 1 and bypassing this authority undermines Congress and the
separation of powers.

Additionally, the SBA is currently grappling with significant workforce reductions and resource constraints. Your
administration’s decision to cut SBA staff capacity by 43% as part of Executive Order 14210 - Implementing the
President’s “Department of Government Efficiency” Workforce Optimization Initiative will only hinder the
agency’s ability to operate efficiently. Burdening the SBA with the enormous task of servicing federal student
loans, which is a function outside its mission and capabilities, would hurt its ability to support entrepreneurs and
small business owners across the country.


1
    20 U.S.C. § 1001 et seq.
As Ranking Member of the House Small Business Committee I request answers to the following questions by
April 21, 2025:

       1. What complications will arise from a 43% reduction in the Small Business Administration workforce
          and the added responsibility of managing the disbursement of student loans for millions of borrowers?

       2. Will Small Business Administration staff members be provided training and resources to manage the
          student loan portfolio – or will experienced Department of Education staff be transferred?

       3. What is the expected timeline to move the student loan portfolio from the Department of Education to
          the Small Business Administration?

According to the Government Accountability Office, nearly 43 million individuals have federal student loans.
These borrowers are teachers, police officers, doctors, lawyers and they all deserve clear and consistent
communication on their loans and how they will be impacted by the drastic actions by the federal government.
To avoid further confusion, errors, longer processing times and more people defaulting on their loans, I strongly
urge you to reconsider transferring the federal student loan portfolio to the Small Business Administration and
encourage you to work with Congress to strengthen and streamline the federal student loan payment programs
and forgiveness programs to better support borrowers.

Pursuant to Rule X of the House of Representatives, the Committee on Small Business has broad authority to
investigate “problems of all types of small business.” The Committee possesses jurisdiction over “assistance to
and protection of small businesses.” Thank you for your attention to this matter. If you have any questions, please
contact Rumer LeGendre at 202-225-2361.

Thank you, and I look forward to your response.


                                                  Sincerely,


                                             Nydia M. Velázquez
                                             Member of Congress


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