HR 2456119th CongressIn Committee

Orderly Liquidation of the Department of Education Act

Introduced: Mar 27, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill, titled the Orderly Liquidation of the Department of Education Act, would terminate the Department of Education (ED) on October 1, 2026. It would create a new Office of Education within the Department of Health and Human Services (HHS) and place a Director of Education under the President, who would supervise two Assistant Directors for K-12 and Higher Education. The bill requires the President to develop and implement an orderly liquidation plan within 180 days of enactment, detailing how ED’s functions will be transferred to other federal entities (e.g., HHS, the National Science Foundation, the Department of the Interior, the Department of Defense, the Department of Labor, the Department of the Treasury, and the Department of Justice). It also provides for the gradual transfer of specific programs, sets a schedule for the termination of certain education funds (with a cap on spending after 2036 for some programs), and tightens a provision on federal Direct PLUS Loans that would end new federal Direct PLUS loans after October 1, 2026. The bill includes various transitional and savings provisions intended to maintain ongoing operations and protect existing obligations during the transition. In short, the bill proposes a complete reorganization and dissolution of the current federal role in education, with responsibilities shifted to a mix of other federal agencies and offices, a new Office of Education in HHS, and a defined, phased process to wind down ED’s activities.

Key Points

1Termination and liquidation timeline
2- Effective Oct 1, 2026, the Department of Education would be terminated; most functions would be repealed unless transferred under the Act.
3- The President must produce and implement an orderly liquidation plan within 180 days of enactment, with consultations to Congress before implementation.
4Creation of the Office of Education within HHS
5- A new Office of Education would be created in the Public Health Service Act, within HHS.
6- A President-appointed Director of Education would lead the Office, reporting to the Secretary of HHS, with two Assistant Directors (one for K-12 and one for Higher Education).
7Transfers of ED functions to other agencies
8- A wide list of ED functions and programs would transfer to various entities, including:
9- Director of Education (HHS) for many K-12 and higher-ed functions and related grant programs.
10- National Science Foundation for a set of higher-ed and related programs.
11- Bureau of Indian Education (Interior) for certain tribal and Indian-education functions.
12- Secretary of the Treasury for major higher-education grant programs and loan programs.
13- Secretary of Defense for certain ESEA-related functions and aid.
14- Secretary of Labor for rehabilitation and career-education-related programs.
15- Director, Bureau of Indian Affairs (Interior) for specific grants.
16- Preschool Development Grants program would move to the new Office of Education (HHS) in coordination with HHS.
17- Transfers are structured to occur not later than Oct 1, 2026, under a plan developed by the President.
18Specific provisions affecting student loans
19- The authority to make federal Direct PLUS Loans would terminate for new loans beginning Oct 1, 2026. Loans disbursed before that date may continue under certain conditions until the earlier of course completion or Sept 30, 2030.
20Assets, funds, and ongoing matters
21- The plan must specify how unexpended ED funds will be allocated, how property and contracts will be disposed of, and how assets and obligations will be handled.
22- Recipients of transferred funds may decline to accept such funds.
23- Existing legal documents and proceedings generally continue under transfer rules, with savings provisions to prevent abrupt legal disruption.
24Funding termination timing
25- No new expenditures after Oct 1, 2036 for certain ED-funded programs (notably parts of Title I of the Elementary and Secondary Education Act).

Impact Areas

Primary group/area affected- Students, families, and local and state education agencies that rely on ED-administered programs (e.g., Title I, IDEA-related grants, early childhood investments, and various federal education initiatives).- Federal employees and contractors currently working for ED or on ED-administered programs (though the bill specifies transfers of functions, not automatic personnel transfers).Secondary group/area affected- Recipients of federal education funding and grants (schools, districts, colleges, universities, state education agencies) who would experience changes in how funds are administered and overseen.- Civil rights enforcement in education would shift to the Department of Justice, potentially changing enforcement mechanisms and processes.Additional impacts- Policy and regulatory shifts: With functions moved to different agencies, program rules, reporting requirements, and oversight could change, creating transitional complexity for grant recipients and institutions.- State and local control: The bill emphasizes returning responsibility for education to states and local communities, potentially increasing state-level governance and flexibility but reducing a centralized federal role.- Budget and planning uncertainty: A major reorganization of education programs and the wind-down of ED could create short- and medium-term budgeting and program continuity concerns for schools, colleges, and families.- Legal and contractual continuity: Savings provisions and continuations of orders and licenses aim to protect ongoing obligations, but ongoing litigation or administrative actions during the transition could arise.

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