Which U.S. government department oversees federal student aid and education policies? The U.S. Department of Education is facing major budget cuts and workforce reductions under the Trump administration, including laying off nearly 1,300 employees. Critics warn that these cuts could disrupt student loan services, teacher training programs, and funding for low-income and disabled students. Several states have filed lawsuits to block the changes, arguing that only Congress has the authority to dismantle the department.