This bill dismantles the Department of Education and moves most federal education authorities into other parts of the executive branch. It creates an Office of Education inside the Department of Health and Human Services, directs a presidential liquidation plan, and reallocates dozens of grant and program responsibilities to agencies such as HHS, NSF, Treasury, Defense, Labor, and Interior.
The measure also schedules sunsets for certain K–12 funding streams and phases out Federal Direct PLUS loans for new periods of instruction. For school and campus leaders, federal agencies, and student‑aid administrators, the bill replaces a single, education‑focused department with a distributed set of responsibilities — a structural change that raises operational, legal, and equity consequences that require careful planning to avoid service gaps for vulnerable students.
At a Glance
What It Does
Sets an effective termination date for the Department of Education of October 1, 2026, and requires the President to develop and implement an orderly liquidation plan within 180 days of enactment. Establishes an Office of Education inside HHS (with a President‑appointed Director and two assistant directors) and transfers specific statutory programs to multiple agencies, while preserving existing legal instruments under savings clauses.
Who It Affects
State and local education agencies that receive federal grants (including Title I, preschool, rural, and homeless programs), institutions that rely on federal higher‑education programs and loan authorities, recipients of IDEA and vocational programs, the Office for Civil Rights’ enforcement stream, and multiple federal agencies that will assume new administrative duties.
Why It Matters
The bill replaces a single federal education agency with a stovepiped set of responsibilities across agencies whose core missions differ from education. That shift alters enforcement (OCR → DOJ), research stewardship (IES → HHS Office), and student‑aid administration (Direct Loan program → Treasury), creating immediate implementation questions about funding, staffing, and continuity of services.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill rewrites where the federal government houses its education work. Rather than keeping a Cabinet‑level Department of Education, it inserts a new Office of Education within Health and Human Services.
That Office will be led by a Director appointed by the President and include two assistant directors specifically for K–12 and higher education. The Office’s existence is tied to administration of functions the President’s liquidation plan assigns to it.
Congress requires the President to produce and implement a liquidation plan within 180 days of enactment and to consult with relevant congressional committees shortly before implementing the plan. The plan must address the termination steps, transfers of administrative responsibility, the relocation of the Institute of Education Sciences to the new HHS office, the move of the Office for Civil Rights to the Department of Justice, the allocation of unexpended funds, and the disposition of property, contracts, records, and other assets.The bill reallocates dozens of specific statutory programs to several agencies rather than leaving them together in one department.
Examples in the text include moving certain K–12 grant programs and IDEA early‑childhood grants to the HHS Office of Education; sending research‑ and institution‑related authorities (including several provisions tied to Howard University and Deaf Education statutes) to the National Science Foundation; assigning student‑loan program administration (including the William D. Ford Federal Direct Loan Program) to the Treasury Department; shifting certain military‑connected school functions to Defense; and moving vocational and rehabilitation responsibilities to Labor.
The text expressly states that transfers are of functions and not of the personnel who currently perform them at the Department of Education.Two time‑limited policy changes are embedded: first, several K–12 funding streams listed in the bill may not be spent after October 1, 2036; second, the authority to make Federal Direct PLUS loans is terminated for periods of instruction beginning on or after October 1, 2026, with a narrow grandfathering rule for loans first disbursed by that date and borrower protections that can last only until completion of the course of study or September 30, 2030. The bill preserves existing actions, contracts, and proceedings through savings provisions and supplies a statutory cross‑reference rule that redirects legal citations from the abolished department to the recipient agencies.
The Five Things You Need to Know
The bill fixes October 1, 2026 as the effective date on which the Department of Education is terminated and most of its functions are repealed or transferred.
The President must develop and implement an orderly liquidation plan within 180 days of enactment and must consult relevant congressional committees at least 15 days before implementing that plan.
The Office for Civil Rights is transferred to the Department of Justice, and the Institute of Education Sciences is transferred into the newly created Office of Education at HHS.
The statute expressly states that transfers cover functions and assets but do not extend to transferring Department of Education personnel to the receiving agencies.
The bill bars expenditure of funds for certain Title I and Title I‑related programs after October 1, 2036, and ends the authority to make Federal Direct PLUS loans for periods of instruction beginning on or after October 1, 2026 (with limited grandfathering through September 30, 2030).
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Creates an Office of Education inside HHS
The bill amends the Public Health Service Act to add an Office of Education within the Department of Health and Human Services. It establishes a President‑appointed Director who reports to the HHS Secretary and requires two assistant directors, one each for K–12 and higher education, who will exercise delegated functions. Practically, the Office centralizes whatever education responsibilities the presidential liquidation plan assigns to HHS, but the Office’s statutory location also signals a reorientation of education functions into a health‑focused department structure.
Orderly liquidation plan and termination date
Congress conditions the Department’s shutdown on a presidential liquidation plan to be developed and implemented within 180 days of enactment; the plan must detail termination steps, transfers, asset disposition, and funding allocations. The bill sets October 1, 2026 as the date when the Department of Education ceases to exist and requires the current Secretary to conclude outstanding affairs under the plan before that date. The consultation window (15 days before implementation) is short and gives Congress only a limited preview of final administrative decisions.
Program‑level transfers to multiple agencies
This section is the operational heart of the redistribution: it lists specific statutory programs and authorities that must move to the HHS Office of Education, the National Science Foundation, the Bureau of Indian Education, the Treasury, Defense, Labor, and the Bureau of Indian Affairs. The provision is program‑by‑program rather than categorical, meaning the receiving agencies inherit statutory duties tied to those programs; it also directs the Secretary of Education to effect those transfers by the termination date. Because transfers are tied to statutes scattered across titles (ESEA, HEA, IDEA, Rehabilitation Act, and others), recipients must reconcile program statutes with their own organizational authorities.
Sunset of specified K–12 funds
The bill prohibits any expenditure after October 1, 2036 for a set of enumerated programs, notably part A (Title I) and part D programs of ESEA. That creates a ten‑year phase‑out window from the department termination date for certain foundational K–12 supports, forcing recipients and states to plan for an eventual federal exit from those funding streams or to seek new statutory authority before the sunset date.
Termination of Federal Direct PLUS loans (wind‑down rules)
Amends the Higher Education Act to terminate the authority to make Federal Direct PLUS loans for any period of instruction beginning on or after October 1, 2026. The statute includes a narrow grandfather clause allowing borrowers whose first Direct PLUS loan disbursement occurs on or before that date to continue receiving PLUS loans only until the earlier of program completion or September 30, 2030. The transfer of the William D. Ford Direct Loan Program itself is assigned elsewhere (Section 5(d)) to the Treasury, creating overlap between program ownership and the PLUS authority elimination.
IES and OCR transfers
Section 8 directs the Institute of Education Sciences (IES) to move into the HHS Office of Education; Section 9 moves the Office for Civil Rights (OCR) to the Department of Justice. Moving IES places federal education research inside HHS, while placing OCR under DOJ relocates civil‑rights enforcement related to education into an agency with criminal and civil enforcement tools but different approaches to compliance oversight.
Cross‑references, exercise of authorities, and savings clauses
The text attempts to minimize legal disruption by treating references to the abolished department as references to the new recipient agencies, allowing receiving officials to exercise previously available authorities, and preserving existing orders, contracts, proceedings, and suits. Those savings provisions protect continuity on paper, but they do not eliminate the practical work of reassigning files, adjusting contract vehicles, and ensuring funding follows programs in appropriations practice.
This bill is one of many.
Codify tracks hundreds of bills on Education across all five countries.
Explore Education in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- State and local education agencies that want fewer federal conditions — the bill reduces a unified federal presence and gives states more discretion over education funding and program design, and it allows recipients to decline federal funds.
- Agencies receiving new responsibilities (HHS Office of Education, NSF, Treasury, DoD, Labor, Interior) — these agencies gain expanded portfolios, influence, and potential new funding streams tied to transferred programs.
- Organizations favoring decentralization and local control — groups that argue federal involvement constrains local decision‑making will see a structural shift aligning with their policy goals.
Who Bears the Cost
- Department of Education employees and career staff — the statute does not transfer personnel, so individuals face uncertain reassignment, potential job loss, or complex interagency hires, and institutional knowledge risks being lost in the shuffle.
- Receiving agencies and their program offices — they inherit statutory responsibilities without automatic personnel transfers and will need new staffing, IT, contracting, and budget adjustments to carry out added programs.
- Low‑income students and districts reliant on Title I and related programs — the scheduled 2036 sunset creates planning and service risks, and potential funding cliffs if Congress does not act to replace expiring authority.
- Students and families who use Federal Direct PLUS loans — the elimination of PLUS lending authority for new periods of instruction after October 1, 2026 narrows borrowing options for parents and graduate/professional students and forces colleges to adjust financing practices.
Key Issues
The Core Tension
The central dilemma is between devolving control to states and localities to reduce what proponents view as federal overreach, versus maintaining a centralized federal capacity to ensure consistent funding, national research, civil‑rights enforcement, and protections for disadvantaged students; the bill resolves one priority by fracturing institutional capacity in ways that may weaken the other.
The bill splits education functions across agencies with very different missions and operational models. That fragmentation will require careful statutory reconciliation where program language assumes administration by the Secretary of Education; the bill’s cross‑reference clause attempts to automate that, but legal gaps are likely when statutes tie duties to educational expertise, rulemaking authority, or service delivery models that match the abolished department.
Because personnel are not transferred, receiving agencies are likely to face hiring bottlenecks and knowledge gaps at the moment they assume legal responsibility for programs.
Funding and appropriations remain unresolved in the text. The bill directs the liquidation plan to specify funds available to receiving entities and the disposition of unexpended balances, but it does not itself appropriate money to cover transition costs.
Transferring authorities such as the William D. Ford Direct Loan Program to Treasury raises operational questions: Treasury does not operate federal student‑loan origination and servicing networks in the same way ED does, so continuity for borrowers depends on new interagency contracts, systems work, or statutory follow‑on.
Moving OCR to DOJ changes the institutional posture of civil‑rights oversight and may alter enforcement practices; this is a legal and policy shift rather than a simple administrative reassignment.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.