Administration Dismantles Department of Education

On March 20, 2025, President Trump signed his long-anticipated Executive Order (Order) to "begin eliminating the federal Department of Education once and for all." The Order states that closure of the Department of Education (Department) will "drastically improve program implementation in higher education."  

The majority of the Order features a series of critiques of the Department dating back to its origins under President Carter. It casts the Department as a "federal education bureaucracy" that has failed students and families. The Order cites the National Center for Education Statistics' 2024 National Assessment of Educational Progress to show "historically low" scores in reading and math proficiency among eighth-grade students nationally. Additionally, it also critiques the Department for having too many employees—a sentiment that aligns with the Department's recent reduction in force—while simultaneously asserting that it has too few employees to manage its US$1.6 trillion student loan debt portfolio.

The Order concludes with the following two directives for the Secretary of Education, Linda McMahon, subject to applicable law and the availability of appropriations:

1. Take all necessary steps to facilitate the closure of the Department "while ensuring the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely."
   
   
2. Ensure that the allocation of Department funds "is subject to rigorous compliance with federal law and administration policy, including the requirement that any program or activity receiving federal assistance terminate illegal discrimination obscured under the label 'diversity, equity, and inclusion' or similar terms and programs promoting."

Consistent with the administration's emphasis on other Executive Orders, this Order focuses on eliminating DEI principles. Pursuant to the Order, educational institutions will be subject to heightened scrutiny, if not termination of federal funds, for non-compliance with administration's recent directives around DEI. The constitutionality of several of these directives, including Executive Order Nos. 14151 and 14173, have been challenged and remain pending before the federal court.

In a Department press release, McMahon lauded the Order as a "history-making" action to return responsibility for education to the states, "where it so rightly belongs." Importantly, 20 states have challenged the Department's reduction in force and then-anticipated efforts to dismantle the Department as unconstitutional and violative of the Administrative Procedures Act, a matter that also remains pending before the federal court. Nevertheless, McMahon promises that the closure of the Department, pursuant to this Order, does not mean cutting off funding from those who depend on it. Rather, the administration will work with Congress to transition the Department's duties, including its enforcement duties under Titles VI and IX, to the states. Furthermore, McMahon states that the closure will alleviate the burden on teachers from "regulations and paperwork," eliminate "administrative burdens" for students, and save taxpayers from "tens of billions of dollars of waste on progressive social experiments and obsolete programs."

The immediate and long-term impact of the Order remains uncertain, as litigation challenging it is expected. In the meantime, institutions of higher education (IHEs) should continue to plan for the possibility that the landscape around federal compliance oversight and funding may shift to another federal agency (i.e., DOJ) or to the states. As set forth in Steptoe's recent publication on the Department's February 14, 2025 Dear Colleague Letter (DCL), IHEs should assess and mitigate risk associated with any upcoming changes as follows:

• Audit your institution's federal contracts and grants from the Education Department for compliance with both federal and state anti-discrimination laws.
  
  
• Conduct a thorough review of your institution's programs, initiatives, and practices to determine where there is risk based on this new guidance. This review should include looking at each of the areas identified in the DCL, both as documented and in practice: "admissions, hiring, promotion, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, [and] graduation ceremonies."
  
  
• Consult with legal counsel to determine how to mitigate risk and ensure that your institution's offerings are not impermissibly discriminatory and align with your institution's stated mission and strategic objectives.
  
  
• Ensure that your messaging is understood from the top down. Institutional leaders should lead this effort and remain available for guidance and consultation throughout the process.
  
  
• As needed, implement changes that you determine will mitigate risk. Some institutions should review criteria for scholarships, grants, prizes, or other initiatives to define eligibility widely, including, for instance, first-generation college graduates, veterans, individuals from disadvantaged backgrounds, socioeconomic status, and other categories that cut across racial and gender lines. Keep in mind that eligibility criteria must not be used as a proxy for race- or gender-based selections.

IHEs may also consider the following actions in preparation for the possibility of greater state oversight:

• Consult with legal counsel to analyze state legislative and regulatory trends and the actual or potential impact on institutional operations and finances. Develop a strategic action plan that is responsive to these analytics.
  
  
• Implement flexible financial planning processes that can quickly adapt to any changes in funding and allocation policies. Establish contingency reserves to manage unexpected changes in funding.
  
  
• Participate in advocacy and lobbying efforts to influence state and national legislation that affects the institution. Where possible, join or form coalitions with peer institutions, community and industry organizations, alumni, and donors to build support and amplify institutional priorities.

Please contact a member of Steptoe's Education practice if you wish to discuss how your institution can navigate these developments. Likewise, we invite you to follow our Education Publications page for relevant updates.