Key Points
- Moving Education Department programs to other agencies doesn’t shrink government - it simply shifts the bureaucracy to a different office.
- Splitting oversight across agencies risks more confusion, weaker accountability, and higher administrative costs for taxpayers.
- Without changing federal law, these transfers avoid real reform and leave the structure (and spending) largely intact.
The U.S. Department of Education has announced two new interagency agreements, handing off selected responsibilities to the Departments of State and Health and Human Services. The stated goal: break up federal education bureaucracy, improve efficiency, and return education to the states.
As someone who believes deeply in higher education (and in the value of federal student aid programs that expand opportunity), I also believe in an efficient government where tax dollars are spent purposefully to achieve specific goals.
That’s why these interagency agreements deserve a closer look.
Shifting programs from one federal agency to another does not necessarily make government smaller. It makes it more complex. And if we’re not careful, it may reduce accountability while ignoring the structural reforms that education policy actually needs.
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What The Department of Education Is Doing
The Department of Education has been implementing a set of "interagency agreements", where functions that have traditionally belonged to the Department are "signed over" to another government agency.
Last year, the administration moved 6 programs out of the Department of Education to other agencies. These interagency agreements (IAAs) sentsix program to the following four agencies:
- U.S. Department of Labor (DOL): Elementary and Secondary Education Partnership and Postsecondary Education Partnership. DOL will be responsible for grants relating to Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutes (MSIs), as well as grants focused on improving student success for college students
- U.S. Department of the Interior (DOI): Indian Education Partnership
- U.S. Department of Health and Human Services (HHS): Foreign Medical Accreditation Partnership and Child Care Access Means Parents in School (CCAMPIS)
- U.S. Department of State (DOS): International Education and Foreign Language Studies Partnership, including programs administered under the Fulbright-Hays grant
U.S. Department of Education staff who manage these programs will be transferred to the four federal agencies.
This week, the Department of Education is moving two additional categories of responsibility.
First, the Department of State will take on a larger role in managing Section 117 foreign gift reporting under the Higher Education Act. Colleges and universities must disclose foreign gifts and contracts totaling $250,000 or more annually. Under the new agreement, State will help manage the reporting portal, assess compliance, and share data with national security stakeholders. This will go along with the new ForeignFundingHigherEd.gov website.
Second, the Department of Health and Human Services will take on administration of several K–12 support programs. These include School Emergency Response to Violence (Project SERV), School Safety National Activities, Ready to Learn Programming, Full-Service Community Schools, Promise Neighborhoods, and Statewide Family Engagement Centers. HHS, through its Administration for Children and Families, will manage grant competitions and technical assistance.
That’s the context.
Now comes the harder question: does this actually improve how education policy works for students and taxpayers?
Moving Responsibilities Isn't The Same As Reform
If you want a simple analogy, it’s this: when your mom tells you to clean your room and you shove everything into the closet or under the bed, you haven’t cleaned anything. You’ve just hidden the mess.
That’s what's happening here. Nobody is actually shutting down or closing the programs at the Department of Education - the bureaucracy, spending, and programs still exist. It's just being shoved into other agencies.
The federal government’s education footprint is not defined by which building houses the employees. It’s defined by the statutes Congress has passed: Title I, IDEA, Pell Grants, federal student loans, and more. If the same programs, funding levels, regulations, and compliance requirements continue (just under different agency letterhead), then government hasn’t been reduced. It has been redistributed.
And redistribution can add friction. Especially when it's done via interagency agreements.
State education agencies, colleges, and school districts now may have to interact with multiple federal departments instead of one. A superintendent dealing with school safety grants may now coordinate with HHS. A university compliance officer handling foreign gift disclosures may work with both Education and State. Workforce development officials already juggle Education and Labor.
Each additional agency means different systems, guidance documents, oversight structures, and internal cultures. That doesn’t automatically mean worse outcomes, but it does mean more coordination is required. And that also usually means more money required - not less.
Accountability Becomes Harder To Track
I think most Americans have concerns around how our government is operating. And one of the big arguments for having one single department overseeing one area is accountability.
When something goes wrong in federal student lending, you know the Department of Education is responsible. When special education compliance fails, you know which office oversees IDEA.
When programs are scattered across different government departments, responsibility becomes less obvious.
Who ultimately answers when a school safety grant is mismanaged? Education, which retains oversight? HHS, which runs the competition? The Office of Management and Budget, which sets funding parameters? Congressional committees overseeing different agencies?
If interagency agreements blur oversight or dilute institutional knowledge, then accountability may weaken rather than strengthen.
What About Structural Change?
There is a larger issue being sidestepped.
If the current administration and lawmakers actually want to dismantle the Department of Education, then the honest approach is legislative reform. Not to say it should be dismantled at all - but there's a correct way to go about it if that's the approach legislators want to take...
That means revisiting statutes, redefining federal roles, and openly debating which programs should exist, be consolidated, or be returned to states.
That is hard work. It requires Congress. It requires political risk.
Interagency agreements, by contrast, operate within existing law. They move existing administrative responsibility without changing the underlying obligations. Title I still exists. IDEA still exists. Federal loan programs still operate under federal rules.
True reform would examine whether federal involvement in certain areas is achieving measurable results relative to cost. It would evaluate overlap across agencies. It would ask whether outcomes justify administrative layers.
Simply transferring administration may streamline some processes. But it also introduces new ones.
Without structural reform, all we're doing here is playing a bureaucratic shell game for social media headlines.
Efficiency Should Mean Results, Not Headlines
I support efficient government. Wasteful spending, redundant oversight, and bureaucratic sprawl undermine public trust.
Just look at the mess with the PSLF buyback backlog. Even with more accountability and oversight, nothing is being done to fix the administrative breakdown impacting American student loan borrowers. It's harming trust in the entire system.
Efficiency is measured in outcomes and cost savings, not press releases.
If interagency agreements reduce duplicative back-office functions, improve data sharing, and clarify compliance pathways, they may prove beneficial. If they instead add new layers of coordination while leaving statutory complexity untouched, taxpayers may see little return.
Government should be organized around mission clarity. Education policy affects more than 50 million K-12 students and roughly 17 million college students nationwide. It involves hundreds of billions of dollars annually.
That scale demands careful oversight and potentially reform.
Breaking apart an agency without addressing the legal framework underneath it risks confusion - and likely more costs, not less. It can also make it harder for voters to understand who is responsible for success or failure.
If the goal is truly to return education to the states, Congress must revisit federal statutes and funding conditions directly. If the goal is efficiency, policymakers should publish measurable benchmarks: administrative cost reductions, processing times, compliance accuracy, and grant turnaround metrics.
If you actually want departmental efficiency, let's see the metrics.
Bottom Line
I believe in higher education. I believe federal student aid has opened doors for millions of families who otherwise would not have had access to college. I also believe that government should be lean, accountable, and focused on results.
Interagency agreements may be a tool. But they are not reform in themselves.
Moving programs from the Department of Education to State or HHS does not automatically shrink government. It complicates it. It blurs accountability. And it distracts from the pressing administrative needs Americans have today.
Cleaning the room means organizing what stays, throwing out what doesn’t, and making it easier to function going forward.
Anything less is just pushing things into the closet, hoping mom doesn't find out.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.