Introduction
The U.S. Department of Education (DOE) plays a significant role in shaping education policies in the United States, particularly in managing federal student loans and grants. One of its major responsibilities is administering financial aid through the Federal Student Aid (FSA) program, which helps millions of students afford higher education.
However, recent changes in DOE policies, including restructuring and potential budget cuts, have raised concerns about their impact on students, both domestic and international. For Indian students and students from other developing countries, these policy changes could influence their access to financial aid, scholarships, and the overall affordability of studying in the U.S.
Understanding Student Loans and Grants
Federal Student Aid (FSA) Program
The Federal Student Aid (FSA) program, managed by the DOE, is the largest provider of student financial aid in the U.S. It offers several types of assistance:
- Grants – Free money for students that does not need to be repaid, such as the Pell Grant.
- Loans – Borrowed money that students must repay with interest. Common types include:
- Direct Subsidized Loans – Available to undergraduate students with financial need.
- Direct Unsubsidized Loans – Available to undergraduate, graduate, and professional students, regardless of financial need.
- Direct PLUS Loans – Offered to graduate students and parents of undergraduates.
- Work-Study Programs – Provides part-time jobs for students to help cover educational costs.
Who Qualifies for Federal Student Aid?
FSA is primarily designed for U.S. citizens and eligible non-citizens (such as Green Card holders). However, international students, including those from India, do not qualify for most federal student aid programs. Instead, they rely on scholarships, private loans, or financial aid from U.S. universities.
Recent Changes in the Department of Education and Their Impact
Policy Shifts and Layoffs
In 2025, under the leadership of Linda McMahon as Secretary of Education, significant changes were made to the DOE:
- The government decided to reduce the size of the DOE and transfer some of its responsibilities to individual states.
- Large-scale layoffs affected nearly 50% of DOE employees.
- Federal student aid policies were revised, focusing more on privatization and reducing government-backed loans.
Effects on U.S. Students
These changes have raised concerns among American students because:
- Federal student loan availability may decrease, making education more expensive.
- Interest rates on government loans might increase if private institutions take over.
- Grant programs and financial aid opportunities may be reduced.
Impact on Indian and Other International Students
1. Increased Financial Burden
Since Indian and other international students are already ineligible for most federal aid programs, they often depend on:
- University scholarships
- Private loans (which have higher interest rates)
- Sponsorships from home-country governments or institutions
If U.S. universities reduce financial aid due to DOE budget cuts, international students may struggle even more to fund their education.
2. Rise in Tuition Costs
If fewer American students can afford U.S. colleges due to reduced federal aid, universities may increase tuition fees to compensate for lost revenue. This could make studying in the U.S. even more expensive for Indian and other international students.
3. Fewer Work Opportunities
International students often rely on campus jobs through university-sponsored work programs. If DOE budget cuts lead to reduced funding for such programs, Indian students might face difficulties finding part-time jobs to support their living expenses.
4. Impact on Student Visas
Changes in DOE policies might indirectly affect visa regulations. If U.S. education becomes too expensive for many students, the number of international student applications may decline. This could lead the U.S. government to revise visa policies, potentially making it harder for students from India and other countries to obtain F-1 student visas.
5. Shift Towards Other Study Destinations
If U.S. education becomes too costly or financially inaccessible, Indian and other international students might explore alternative destinations such as:
- Canada – Offers more scholarships and work opportunities for international students.
- United Kingdom – Has more financial aid options and post-study work permits.
- Australia – Provides scholarships and job prospects for international graduates.
This shift could reduce the dominance of the U.S. as a top study-abroad destination.
Is the DOE Policy Change Useful for Indian and Other Developing Countries?
While the policy changes have created uncertainty, there are some potential benefits for Indian and other third-world countries:
1. Encouragement for Local Education Growth
If studying in the U.S. becomes less affordable, students may focus more on high-quality educational institutions in their home countries. Governments in countries like India might invest more in higher education to retain talent.
2. Opportunities for Other Countries
With fewer students going to the U.S., countries like Canada, Germany, and Australia may attract more international students by offering better financial aid and student-friendly visa policies.
3. Increased Focus on Online Education
High tuition costs and reduced funding in the U.S. might push students toward online education and alternative learning methods. Indian students may explore online courses, international certifications, and distance learning from reputed global institutions.
Conclusion
The recent changes in the U.S. Department of Education and its impact on student loans could make studying in the U.S. more challenging for both American and international students. While federal aid cuts may not directly affect Indian students, they could lead to increased tuition fees, fewer work opportunities, and a shift in student visa policies.
For Indian and other third-world country students, this means re-evaluating their study-abroad choices, considering alternative destinations, and focusing on scholarships or government-sponsored education programs. The future of international education in the U.S. will depend on how universities and policymakers adapt to these changes.
