McMahon Shifts Education Functions to Labor and Treasury, Pitching Dismantling of ED as 'Proof of Concept'

Education Secretary Linda McMahon is handing off pieces of her own department to two other Cabinet agencies, and she says the point is to show Congress it can be done. Through a series of interagency agreements, the Department of Labor and the Department of the Treasury are taking over work that the Department of Education has carried out for decades.

McMahon described the mechanics in an interview with Fox News Digital. Under the agreements, she said, the Education Department is contracting with other agencies to perform the functions they have been given. The first large block of work went to Labor. In her telling, the sequence began with career and technical education, then moved to K-12, and finally to higher education.

At Labor, the department is taking on a major role in the day-to-day administration of adult education, family literacy, and career and technical education programs. Those programs fall under the Workforce Innovation and Opportunity Act and the Perkins Act. Education keeps its statutory responsibilities and oversight, while services shift to states and grant recipients.

Treasury's role is the other major piece. The department has agreed to take over key operations tied to federal student loans, including collections on defaulted debt. Education officials say both arrangements belong to a broader set of agreements meant to serve as a proof of concept: evidence for Congress that essential education functions and funding flows can be reassigned across executive branch agencies without disruption.

The effort traces back to Donald Trump's 2024 campaign, when he promised to eliminate the department. He later signed an executive order directing his administration to begin dismantling it. McMahon says she wants lawmakers to see that federal support for students will not falter without a standalone Cabinet department. She has asked Congress to let her prove that it works, and she acknowledged that the final decision belongs to lawmakers, who must vote on closing the department. She said she hopes they will vote to do so, even if it means she fires herself, because she believes outcomes will be better for students.

Her argument rests on a view of what the department does. During the government shutdown, she contended that Education is primarily a pass-through for federal money: Congress appropriates the funds, they flow through the department, and they reach states and local authorities. Some programs, she said, were duplicated elsewhere or handled better by other agencies, and she wants results measured by student outcomes, with teachers and administrators held accountable.

Outside analysts see a change in scale. Andrew Gillen, a higher education policy research fellow at the Cato Institute, told Fox News Digital that moving core duties such as student loans and formula grants differs substantially from earlier interagency agreements, which historically covered minor administrative support.

Other steps point the same direction. Earlier this year the department announced it had vacated the Lyndon B. Johnson Department of Education building so the Department of Energy could move in by August, a move officials called a prudent way to save hundreds of millions of taxpayer dollars. The department also launched a process letting states seek greater flexibility with federal education funds and lighter administrative burdens. Iowa was the first state to participate, and a July 2025 letter encouraged states to apply for the waiver.

What happens next rests with Congress. Whether lawmakers vote to close the department will likely depend on whether these arrangements show money still reaching schools and students without interruption.