PROVIDENCE, RI – After the Trump Administration announced plans to slash 43 percent of the U.S. Small Business Administration’s (SBA) workforce while also reducing SBA capabilities and shifting management of the federal government’s student loan portfolio from the U.S. Department of Education to the SBA, U.S. Senator Jack Reed (D-RI) denounced the move as irresponsible and harmful to small businesses, students, and taxpayers alike.

“Small businesses are a big part of our economy and we should be helping them innovate, grow, and thrive,” said Senator Reed, the Ranking Member of the Senate Appropriations Financial Services and General Government (FSGG) Subcommittee, which oversees funding for the SBA.  “Instead of cutting red tape, President Trump is piling on new bureaucratic challenges and decimating customer service capabilities of federal agencies.  He is eliminating key SBA resources and staff that help small businesses access capital and create jobs while at the same time trying to tack on new student loan mandates.  His chaotic tariff taxes are already raising costs for entrepreneurs, and these latest SBA cuts will add more financial pressure and uncertainty for many small businesses.”

“President Trump’s irresponsible decision to downsize the SBA and saddle it with overseeing a massive $1.6 trillion student loan portfolio of over 40 million-plus Americans makes zero sense. The intent to transfer these loans flies in the face of both education and appropriations law.  It would sow chaos and confusion, burden borrowers, and needlessly cost taxpayers.  If people don’t know where to turn or can’t get the expert help they need from the proper federal agency then it could lead to a spike in loan defaults,” said Reed, noting President Trump can’t legally transfer management of the loan portfolio to the SBA without Congressional authorization.

Reed continued: “Putting the financial interests of students and small businesses at risk is a screwup by the Trump Administration.  I expect these cynical ploys will be challenged in court.  And I will work with my colleagues in Congress to uphold the law, support small businesses, and ensure that student borrowers can get the loan servicing and protections they need.”

Reed says Congressional authorization is needed in order to legally transfer management of the extensive student loan portfolio from the U.S. Department of Education to the SBA.

Created by Congress in 1953, the SBA helps American entrepreneurs nationwide start, build, and grow businesses. The SBA is a key partner for Rhode Island small businesses, offering a variety of services that small businesses can leverage, including:

  • Financing: SBA offers a range of loans, grants, and other funding programs to eligible businesses.
  • Education and training: SBA offers educational programs and counseling to help small business owners start and grow their businesses.
  • Disaster assistance: When disaster strikes, SBA provides critical assistance to businesses, homeowners, and renters.
  • Government contracting: SBA helps small businesses compete and win government contracts.
  • Policy advocacy: SBA works with Congress and local governments to ensure small business input is heard in policy matters.
  • Support underserved businesses: SBA helps level the playing field for veteran, women, and minority small business owners.