Key Points
- The U.S. Department of Education will leave its Lyndon B. Johnson headquarters building and move to a smaller office at 500 D Street SW by August 2026, saving an estimated $4.8 million per year in operating costs.
- The Department of Energy will take over the LBJ building, avoiding an estimated $350 million in costs at its current outdated Forrestal building.
- The move follows a nearly 50% workforce reduction at the Education Department.
The U.S. Department of Education announced Thursday that it will move out of its longtime headquarters in Washington, D.C., downsizing to a smaller building.
The agency will relocate to a smaller federal office one block away, a move that underscores how much the department has shrunk under the Trump administration’s push to dismantle it.
The LBJ building, which sits at 400 Maryland Avenue SW, is now approximately 70% vacant following a reduction in force that cut nearly half of the department’s workforce.
The move is targeted for August 2026.
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Headquarter Moves Designed To Cut Costs
Under the plan, the Education Department will relocate to 500 D Street SW, a federal building roughly a block from its current home. The smaller footprint is expected to save taxpayers approximately $4.8 million annually in lower rent and operating expenses.
The Department of Energy, meanwhile, will leave its aging James V. Forrestal building and take over the LBJ headquarters. Officials say the Forrestal building requires an estimated $350 million in deferred maintenance. This is money the government can avoid spending by moving Energy into the LBJ facility.
“Relocating to the LBJ building will deliver significant taxpayer savings and will ensure the Energy Department continues to deliver on its mission,” said Energy Secretary Wright in a statement.
GSA Administrator Forst framed the deal as a model for smarter federal real estate management. “This is the government working smarter for the American people,” he said, adding that the move strengthens the government’s overall real estate portfolio.
A Visible Reminder Of The Shrinking Of The Department Of Education
The headquarters move comes one year after President Trump signed an executive order directing the federal government to wind down the Department of Education and shift its functions back to the states. Since that order, the administration has carried out a reduction in force affecting nearly 50% of the department’s employees, consolidated satellite offices in the D.C. metro area, and transferred oversight of several programs to other agencies.
The result: a headquarters building that the administration says is roughly 70% unused.
What This Means For Federal Workers And Department Services
The department said there is no immediate impact on remaining staff. Employees will receive updates from their managers about the logistics of the move in the coming weeks. The relocation will be phased to prevent interruptions to ongoing work, including management of federal student aid and grant programs.
Officials stressed that no federal services will be disrupted during the transition.
For borrowers and families who interact with the Education Department (primarily through federal student loans and Pell Grants) the move itself should not affect day-to-day service.
However, the broader downsizing effort has raised questions about whether a leaner agency can maintain the same level of borrower support and oversight of loan servicers.
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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.
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