WASHINGTON - US President Donald Trump on Friday said that the Small Business Administration (SBA) will take charge of managing student loans, instead of the Education Department, which he aims to dismantle.

"We have a portfolio that is very large, lots of loans, tens of thousands of loans, pretty complicated deal," Trump told reporters in the White House Oval Office. "That's coming out of the Department of Education immediately."

Also on Friday, the SBA announced that it is cutting more than 40 percent of its roughly 6,500 staff, as part of the Trump administration's broader initiative to reduce the federal workforce.

The president's remarks came one day after he signed an executive order to formally begin the process of dismantling the Education Department. He said his administration is returning education back to the states.

Beyond the "core necessities, my administration will take all lawful steps to shut down the department," Trump said in a speech at the White House Thursday. "We're going to shut it down and shut it down as quickly as possible," Trump said.

The US president noted that the department's functions such as Pell Grants -- federal financial aid that helps low-income undergraduate students pay for college, Title I which provides federal funding to school districts and schools that serve a high percentage of students from low-income families -- and funding resources for children with disabilities and special needs, will be "fully preserved" and be "redistributed to various other agencies and departments."

On Friday, Trump also said that the Health and Human Services Department (HHS) "will be handling special needs and all the nutrition programs and everything else."

"I think that will work out very well. Those two elements will be taken out of the Department of Education," Trump said.

Americans owed about $1.6 trillion in student loans as of June 2024 -- 42 percent more than what they owed a decade earlier, according to an analysis by the Pew Research Center. Among adults under 40 who have at least a four-year college degree, for example, 36 percent have outstanding student loan debt, the analysis showed.

Trump's bid to dismantle the Education Department has drawn criticism from Democrats. "Attempting to dismantle the Department of Education is one of the most destructive and devastating steps Donald Trump has ever taken. This. Will. Hurt. Kids," Senate Minority Leader Chuck Schumer said in a post on social media platform X.

"This horrible decision by Donald Trump will be felt by teachers, parents, school leaders, and in the quality of education our children receive," Schumer said. "Across the country property taxes will go up, while the quality of many schools will go down."

The Democratic leader also noted that presidents cannot establish departments or eliminate them, "only Congress can do that."