Federal Student Aid, Special Education Oversight Shift to Treasury and HHS as DOE Faces Abolishment in 270 Days

The “Sovereign States Education Restoration Act” is not subtle. It proposes the total abolition of the U.S. Department of Education (DOE) 270 days after it becomes law. This isn’t a reorganization; it’s a shutdown, complete with the mass repeal of nearly every existing federal education program the DOE currently runs (SEC. 2).

The Great Federal Education Shuffle

While the DOE itself is going away, a few massive programs are being plucked out and moved to agencies that have zero experience running them. This is where the real-world impact hits. The Department of Health and Human Services (HHS) gets the Individuals with Disabilities Education Act (IDEA) and Impact Aid programs. For parents of children with special needs, this means the federal agency responsible for ensuring their child’s rights and services are met shifts from an education-focused body to the massive health and welfare bureaucracy at HHS (SEC. 3).

Meanwhile, the Department of the Treasury—yes, the agency that prints money and manages taxes—is getting the lion’s share of college funding. This includes the entire federal student aid apparatus: Pell Grants, the Federal Direct Loan Program, and all other federal student loan and grant programs (SEC. 3). If you have federal student loans, or rely on Pell Grants to pay tuition, your financial aid administrator is now the Treasury Secretary. This raises immediate questions about whether a department focused on fiscal policy has the expertise or bandwidth to manage the complex, student-focused services required by these critical programs.

Block Grants: State Control, Federal Money

The bill replaces the current system of targeted federal programs with two new block grants, administered by the Treasury, for K-12 and postsecondary education (SEC. 4). The money is distributed to states based on their student enrollment numbers—including public, private, and home-schooled students for the K-12 grant. States that accept this money get massive flexibility on how they spend it, but they must agree to annual audits and data sharing with the Treasury.

For regular folks, this is the biggest change. Instead of federal dollars being earmarked for specific things—like improving literacy in low-income schools or funding specific teacher training—states can use the money for “just about anything” related to education. While proponents might argue this gives states necessary flexibility, it means that services you currently rely on—say, a specific after-school program or a career and technical education initiative—could disappear overnight if your state decides to prioritize something else with its new, flexible federal cash.

Civil Rights Enforcement Goes to the DOJ

The bill recognizes that civil rights protections still need to be enforced, but it shifts that responsibility away from the defunct DOE’s Office for Civil Rights. Instead, the Civil Rights Division within the Department of Justice (DOJ) will handle enforcement for the new block grants, IDEA, and the student aid programs transferred to Treasury (SEC. 5). The DOJ will enforce key laws like Title IX (sex-based discrimination) and Section 504 of the Rehabilitation Act (disability discrimination).

While the DOJ is the nation’s primary law enforcement agency, this move centralizes enforcement outside of an education-specific regulatory body. For a student or parent filing a complaint, this means navigating the federal civil rights apparatus may become a much more legalistic and potentially slower process, as the dedicated educational expertise is removed from the equation. The bill authorizes funding equal to the DOE’s 2019 budget, but caps the new block grants at 50% of that total, with another 20% reserved for federal oversight, suggesting potential cuts to overall funding levels for state flexibility (SEC. 6).