Trump says the Small Business Administration is taking over student lending. Experts say it’s illegal.

President Trump announced on Friday that he plans to move management of the federal student loan program to the Small Business Administration (SBA), a major step in his effort to dismantle and possibly shut down the Department of Education.

“We have a portfolio that is very large. Lots of loans. Tens of thousands of loans. Pretty complicated deal. And that’s coming out of the Department of Education immediately,” Trump said, vastly understating the number of outstanding loans — there are currently about 43 million Americans with student debt.

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The president offered few details about how the Small Business Administration would go about assuming control of the loan program or what borrowers could expect in the weeks ahead, but suggested the process would be smooth.

“They’re all set for it. They’re waiting for it,” he said, referring to the SBA. “It will be serviced much better than it has in the past. It’s been a mess.”

The White House and Commerce Department did not return a request for comment. Education officials referred Yahoo Finance to an interview with Education Secretary Linda McMahon on Fox News on Friday, in which she said, in part, that she would work with the SBA on a strategic plan.

Trump has signaled for weeks that he intended to move student lending out of the Department of Education, but it’s unclear why the White House settled on placing it within the Small Business Administration. Many conservative experts have argued that student lending could be better managed by the Treasury Department, which has long acted as a debt collector for most of the federal government.

The SBA, currently headed by former Georgia Sen. Kelly Loeffler, is a relatively small department. And while it has long run small business lending programs, it has rarely been responsible for anything close to the size and scope of the student loan program. Its management of the pandemic small business rescue efforts such as the Paycheck Protection Program were often criticized for being scattershot and plagued with fraud.

On Friday, the SBA announced plans to reduce its own workforce by 43%.

“This has mostly been discussed in terms of Treasury. It’s on the administration to explain the rationale for this move, and I haven’t seen that they’ve yet done so,” said Frederick Hess, director of education policy studies at the conservative American Enterprise Institute. “Until they make that case, I think it’s fair to ask hard questions about why the SBA and how this will work.”