Trump Administration Weighs Plan To Shut Down Education Department: Which Stocks Could Be Affected?

by Piero Cingari Benzinga Staff Writer

Zinger Key Points

Trump administration considers dismantling the Education Department, potentially impacting student loans and edtech companies.
Navient and Nelnet, major federal loan servicers, could see contract disruptions; both stocks closed lower Monday.
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President Donald Trump administration is reportedly considering executive actions to dismantle the U.S. Department of Education, a move that could have far-reaching implications for publicly traded companies in the education, student loan, and technology sectors.

The Wall Street Journal reported Monday that officials are weighing an executive order that would shut down non-statutory functions or reassign them to other federal agencies, with a longer-term goal of abolishing the department altogether.

The potential dismantling of the Education Department would be a significant step toward fulfilling Trump's campaign promise to eliminate the department, reduce federal involvement in education, and shift authority to the states.

This follows the Trump administration's Jan. 25 executive order titled "Ending Radical Indoctrination in K-12 Schooling." The order aims to reshape the U.S. education system by eliminating federal support for what the Trump administration describes as “radical indoctrination” in schools and promoting “patriotic education.”

Student Loan Servicing And Private Lending

One of the most closely watched areas in the wake of potential changes is the student loan industry.

Navient Corporation NAVI and Nelnet Inc. NNI, which handle a large portion of federal student loan servicing, could see disruptions in their contracts. Shares of Navient and Nelnet closed 0.9% and 0.3% lower on Monday.

Private lenders like SoFi Technologies SOFI, which focuses on student loan refinancing, might benefit from increased demand if federal loan programs are scaled back.

For-profit education providers, which have often been subject to federal oversight and regulation, could see policy shifts that affect their business models. Institutions such as Grand Canyon Education Inc. LOPE and Strategic Education Inc. STRA.

Beyond student loans and for-profit education, the potential dismantling of the Education Department could have ripple effects on technology companies that provide tools and services to schools.

Companies like Chegg Inc. CHGG, which offers online learning resources, and Instructure Holdings Inc. INST, the parent company of learning management system Canvas, could face shifts in demand as schools adapt to new federal and state policies.

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