Updated: This story has been updated to add further comment from the Education Department.
The U.S. Department of Education was already working behind the scenes to move two key programs to other federal agencies before a court order halted the work, according to a new legal filing.
Even though Congress hadn’t approved transferring oversight of student loans and career-technical and adult education grants out of the Education Department—and despite the Trump administration’s assertion that it’s not dismantling the department without Congress’ OK—the filing shows the agency was testing the waters for shifting its portfolio of programs elsewhere in the federal government in the event of its closure.
The Education Department had penned agreements with the U.S. departments of Labor and the Treasury to start moving some of its responsibilities—and even some staff—arguing that Education Secretary Linda McMahon has the authority to strike up interagency partnerships. One of the interagency agreements also pointed to President Donald Trump’s March 20 executive order, which directed McMahon to “facilitate” the closure of the department while “ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely,” as part of the legal authority behind it.
McMahon has said repeatedly that only Congress can approve the dissolution of the Education Department. The education agency’s oversight is also written into statutes authorizing its various programs.
“This filing shows us that no, actually, they weren’t waiting on Congress to do certain things,” said Derek Black, a professor of law at the University of South Carolina who specializes in constitutional law and public education. “On one level, this could be the most damning piece of evidence out there.”
The two agreement letters, submitted to a Massachusetts federal court June 10 in response to a judge’s preliminary injunction that has so far halted the firing of nearly 1,400 Education Department staff members are fairly typical documents between agencies, said Julia Martin, legislative director for the Bruman Group, a law firm that represents school districts.
But the context they’re coming in—amid the president’s order on dismantling the department and his spoken musings on transferring specific functions to other agencies—shows that the agency is preparing to move key functions and is taking the first steps.
“They suggest that, in fact, preparations are being made for at least exploring how those functions could be handled by other agencies,” she said. “The question is: At what point does it become the department not performing its functions? That’s really up to the court.”
In her declaration to the court laying out the agency’s steps to comply with Judge Myong Joun’s May 22 order, chief of staff Rachel Oglesby said the department had paused “significant interagency agreements, preventing the department (and other agencies) from pursuing operational efficiencies and cost-savings.”
Madi Biedermann, a department spokesperson, said in a statement that the partnership with Labor would allow the agencies to “better coordinate and deliver on workforce development programs and strengthen federal support for our nation’s workforce, a top priority of the Trump Administration.”
Her statement didn’t address the agreement with Treasury.
“This is one of many existing agreements ED has with other agencies to collaborate on services for the American people,” Biedermann continued. “As acknowledged in the status report, ED has paused implementing this IAA while we seek relief from the district judge’s preliminary injunction.”
The agreements began to move grant oversight and some Education Department staff to other agencies
One agreement, signed in May, sought to move $2.67 billion to the Labor Department to oversee administration of programs run by Education Department’s office for career, technical, and adult education.
Under the agreement, the Labor Department’s Employment and Training Administration would carry out the authorization of formula grants under the Perkins Act, a roughly $1.4 billion program that flows to schools to pay for CTE. It would distribute other formula grants and discretionary grants that support adult learners. It would also be tasked with implementing programs supporting adult literacy, conducting monitoring visits to ensure compliance, monitoring states’ draw-downs of funds, and more.
The agreement does state that the office of career, technical, and adult education in the Education Department maintains authority over the programs—not overstepping the statutory requirement for the office to exist, Martin said.
The other—a “detail” agreement—with the Treasury Department sent nine staff members from the Education Department to the other agency to “support Federal Student Aid functions performed in partnership with Treasury” beginning April 9. The department retained the responsibility for paying the staffers. A spokesperson for the department later said the nine staff members were part of the department’s default collections unit to restart the Treasury Department’s offset program, which helps collect delinquent debt.
Their expertise—from staffers including a senior adviser at the Federal Student Aid office, the deputy assistant secretary for acquisition and grants, program specialists, and several Department of Government Efficiency staff assigned to the Education Department—“would lend itself to trying to figure out if it is practicable to transfer student loan management and what it would take, as well as potentially renegotiating agreements with servicers,” Martin said.
In her report to the court, Oglesby said that the department would not recoup the transferred staff members, as “[t]he department does not view the preliminary injunction as requiring the department to disrupt the status of those nine detailees, as none were subject to the department’s March 11, 2025 [reduction in force] notice.”
Meanwhile, the department did halt negotiations on a separate agreement regarding student loan management, according to Oglesby.
The agreements show first steps toward shuttering department
The agreements—and tangible effort to carry out the president’s spoken intentions—came as a surprise to associations that interface with the department on the affected programs.
Megan Walter, a senior policy analyst for the National Association of Student Financial Aid Administrators, which represents college officials who interface with the Education Department’s student aid operation, said the idea of moving the nearly $1.7 trillion loan portfolio to Treasury, “an agency not built for direct, large-scale consumer loan servicing,” was troubling.
“By prematurely laying off as much as half its staff in anticipation of moving the loan portfolio to Treasury, this massive reduction, undertaken before any such transfer was finalized or a detailed transition strategy established, means ED would now critically lack the personnel essential to ensure even a remotely smooth handover of this critical function, should the move proceed,” she said.
Alisha Hyslop, chief policy, research and content officer for the Association for Career and Technical Education, said the organization that advocates for CTE programs was aware of Trump’s public assertions about transferring programs, but she had not heard anything about the interagency agreement with Labor.
It’s concerning that the agreement was worked out without any consultation with the field, she said.
Beyond that, though, it’s clear in the Perkins Act that CTE is inherently an Education Department program and differs from the philosophy and operation of most Labor Department programs, Hyslop said.
“When you’re talking about a 6th grader starting a career exploration program that might be funded under Perkins, that’s just a very different goal for their future trajectory than a dislocated worker that was laid off and needs to get back to work as quickly as possible,” she said.
Statute does allow for the secretaries to collaborate across departments, Martin said. And it isn’t unusual for several to partner on projects of common interest (for instance, the Biden administration’s Education Department partnered with the U.S. Department of Commerce on a classroom-to-career program). Sharing staff is a way to share knowledge and resources, especially when they’re working in the same area of law and policy, Martin said.
However, the law doesn’t allow agencies to give congressionally mandated responsibilities away wholesale, Black said.
“You can be in friendship. It’s kind of like: You can spend the night at your friend’s house. But are you allowed to move in?” Black said. “Those are two radically different things. I think that’s the sort of gray area they’re wanting, or trying, to exploit.”
As the president has made his intentions for the Education Department clear, he and McMahon have deliberated where the agency’s numerous programs could go—but have yet to release a plan for parsing out its functions. Earlier this year, he told reporters unprompted that the department’s oversight of the Individuals with Disabilities Education Act would shift to the U.S. Department of Health and Human Services and that the U.S. Small Business Administration would oversee student loans. McMahon has also suggested shifting IDEA oversight to Health and Human Services, including at her confirmation hearing.
It begs the question: are these the only two agreements out there? Black said.
“Is it because these actually are the only two, or is it because they haven’t written the third and fourth and fifth ones yet?” he said.
As the Trump administration has been taking steps to comply with Joun’s order, the administration has twice appealed it, with its latest request to block the order now pending before the U.S. Supreme Court.
In its request to the Supreme Court, the administration argued that there’s no evidence that it’s proceeding with dismantling the department without Congress’s say-so.
