What dismantling the Education Department means for student loans in Virginia

• And Virginians carry an average $40,136 in debt per borrower, the fourth highest in the nation.

The big picture: The Education Department has played a key role in managing some $1.5 trillion in student debt for more than 40 million borrowers, and a vast majority of its budget is allocated to the office that oversees student loans.

• Even before moving to abolish the agency, the Trump administration blocked student loan forgiveness and repayment plans, slashed staffing, and wiped the federal watchdog agency tasked with overseeing student loan servicing and collections.

The latest: Trump said Friday that the Small Business Administration will now handle student loans.

• "The Department of Education is not a bank, and it must return bank functions to an entity equipped to serve America's students," the executive order says.
• The SBA separately announced plans last week to cut 43% of its workforce, or 2,700 of its nearly 6,500 staffers.

State of play: During the transition, there could be slower processing times for loans, applications and payments, and the potential for more administrative errors.

• While it's possible there could be a pause in borrowers' payments for a period, they would still eventually be due.
• Pell grants, subsidized loans and work-study grants are mostly congressionally appropriated. While the Education Department manages them, it would take an act of Congress to get rid of them.

Threat level: There is a lot of uncertainty about what's going to happen.

• "If you're a current federal borrower and you're concerned, the best proactive step is to save your information," NerdWallet's lending expert Kate Wood told Axios before the executive order was issued.
• Go to studentaid.gov and screenshot or download your repayment history, she added.

Zoom out: Most of the rest of the department's $268 billion budget goes to ensuring K-12 students get equal access to a quality education.

• This includes dispensing supplemental funding to high-poverty K-12 school districts that provide vital child care services for many low-income and rural communities across the country.
• The department also enforces federal civil rights laws to prohibit discrimination.

The shuttering of the department would "return education authority to the States," per the EO, a move Gov. Youngkin embraced.

What they're saying: "Virginia is ready to take full responsibility for K-12 education," Youngkin said in a statement.

• "We have implemented a high-expectations agenda that sets rigorous standards, holds schools accountable for results and prioritizes resources to the students and schools that need the most support."

What we're watching: Trump's directive will likely face legal opposition because eliminating a federal department requires an act of Congress.

• However, the administration can cut key funding in the meantime.

Keep reading for more on what the department shuttering could mean for student loans