Orderly Liquidation of the Department of Education Act

Bill Number: H.R. 2456
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Education
Status: Introduced
Latest Action: 2025-03-27: Referred to the House Committee on Education and Workforce.
Last Updated: 2025-07-21T19:44:15Z

AI-Generated Summary

Purpose of the Legislation

The bill, titled the "Orderly Liquidation of the Department of Education Act," seeks to eliminate the U.S. Department of Education (established in 1979) due to findings that it has not improved education quality, has failed to support state and local efforts, and has imposed overly restrictive federal policies on local educators and parents. Its main goals are to wind down the department in an organized way, transfer its responsibilities to other federal entities or states/local communities, and reduce federal oversight in education to empower state and local control.

Key Provisions

Creation of a New Office: Establishes an Office of Education within the Department of Health and Human Services (HHS), led by a Director appointed by the President. This office includes assistant directors for K-12 and higher education to handle delegated functions.
Termination and Liquidation Plan: The Department of Education ends on October 1, 2026. The President must create and implement a detailed plan within 180 days of enactment, including steps for termination, transfers, fund allocation, and handling of assets like property and contracts. The Secretary of Education must wrap up operations by the deadline.
Transfer of Functions: Various education programs and authorities are reassigned to other agencies by October 1, 2026, without transferring Department of Education personnel. Key transfers include:
To HHS Office of Education: Programs for blind education, minority-serving institutions, student aid, disabilities support (e.g., Infants and Toddlers with Disabilities), K-12 grants (e.g., Title I funding for low-income schools), after-school programs, homeless education, and preschool grants.
To National Science Foundation (NSF): Support for historically Black colleges, tribal colleges, deaf education institutions, and certain higher education grants.
To Department of the Interior (Bureau of Indian Education/Affairs): Tribal education grants, career/technical education for Native Americans, and rehabilitation services for Native Americans.
To Department of the Treasury: Federal student aid programs, including Pell Grants, supplemental grants, work-study, and the Federal Direct Loan Program (excluding PLUS loans after 2026).
To Department of Defense: Impact aid for schools affected by military bases or federal property.
To Department of Labor: Vocational rehabilitation, supported employment for people with disabilities, and career/technical education functions.
Specific Terminations and Phase-Outs:
Ends Federal Direct PLUS Loans (parent and graduate student loans) for instruction starting after October 1, 2026, with limited exceptions for ongoing borrowers until 2030 or course completion.
Phases out certain K-12 grants (e.g., Title I basic grants and neglected/delinquent youth programs) by October 1, 2036, prohibiting further spending.
Other Transfers: Moves the Institute of Education Sciences (research arm) to HHS's new Office of Education and the Office for Civil Rights (handles discrimination complaints in education) to the Department of Justice, including their personnel and assets.
Flexibility and Continuity: Grant recipients can opt out of federal funds. Existing laws, contracts, lawsuits, and proceedings continue unaffected, with references updated to new agencies. Transferred officials retain prior legal authorities.

Significant Changes to Existing Law

Repeal of Department Functions: Directly repeals most administrative responsibilities of the Department of Education, except those explicitly transferred, marking a major restructuring of federal education governance under laws like the Higher Education Act, Elementary and Secondary Education Act, and Individuals with Disabilities Education Act.
Decentralization: Shifts authority from a centralized federal department to multiple agencies and states/local entities, ending unified federal oversight. Introduces opt-out options for funds, which did not previously exist broadly.
Loan and Grant Limits: Amends the Higher Education Act to terminate PLUS loans and schedules the end of specific K-12 funding streams, altering long-standing federal support mechanisms without replacing them federally.

Potential Impacts

On Government Agencies: Increases workloads for HHS, Treasury, NSF, Interior, Defense, Labor, and Justice, requiring them to absorb education-related budgets, staff training, and program management. The Department of Education's ~4,000 employees face job losses or reassignments elsewhere in government. Unexpended funds and assets are reallocated, potentially streamlining federal operations but causing short-term administrative disruptions.
On Citizens: States and local school districts gain more control over education but may lose federal funding streams, affecting programs for low-income students, disabilities, homeless youth, and rural schools. Students could see changes in aid availability (e.g., no new PLUS loans), higher education access for minorities, and research support. Parents and educators might benefit from reduced federal regulations but face funding gaps if states do not fill them.
On International Relations: Minimal direct impact, as the bill focuses on domestic K-12 and higher education; however, reduced federal research (via Institute of Education Sciences) could indirectly affect U.S. standing in global education comparisons or international student programs.

Main Stakeholders Affected

State and Local Governments/Educators: Gain authority but risk losing federal grants (e.g., Title I for disadvantaged students), impacting school budgets and program continuity.
Students and Families: Affected by shifts in financial aid, disabilities services, and K-12 support; low-income, disabled, homeless, and minority students may face disruptions.
Higher Education Institutions: Universities and colleges (especially minority-serving ones) see program transfers, with potential funding stability under new agencies but risks from loan changes.
Federal Agencies and Employees: Receiving agencies like HHS and Treasury must integrate new roles; Department of Education staff face termination of their department.
Advocacy Groups: Organizations for civil rights, disabilities, and Native American education may need to adapt to new oversight bodies like the Department of Justice.

Notable Legal, Constitutional, or Political Implications

Legal: The bill includes savings clauses to preserve ongoing contracts, lawsuits, and rights, minimizing immediate legal challenges from abrupt changes. Transfers maintain prior authorities, but implementation could invite litigation over fund reallocations or program disruptions under existing education laws.
Constitutional: Aligns with the 10th Amendment by devolving education (a state power) to local levels, reducing federal involvement; however, it could raise questions about federal treaty obligations or equal protection if transfers unevenly affect protected groups (e.g., via civil rights office move).
Political: Represents a significant policy shift toward federalism, potentially polarizing debates on education equity versus local control. As an introduced bill (not yet law), it requires Senate passage and presidential approval; its findings criticize federal overreach, which could fuel broader discussions on government reorganization.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Moran, Nathaniel [R-TX-1]

Recent Actions

2025-03-27: Referred to the House Committee on Education and Workforce.
2025-03-27: Introduced in House
2025-03-27: Introduced in House

Bill Versions

Orderly Liquidation of the Department of Education Act — issued 2025-03-27 — PDF (20 pages)