Dismantling the Department of Education and Opening a University in 2025

I’ve been working in and around higher education for over a decade—consulting with entrepreneurs, colleges, and occasionally even state governments. Normally, the big talk in education revolves around “what are the best states to open a university” or “how much does it cost to open a university”. But this year, the conversation has taken a truly dramatic turn: an executive order aimed at dismantling the U.S. Department of Education.

If you’re like me, you probably saw the headlines and wondered, “Wait, how is that even possible?” Trust me, I had the same reaction. After I settled down and started digging through the actual text of the order, I realized a few important things:

1. A single executive order can’t immediately erase a major government department.
2. Congress plays a massive role here.
3. But—there are some very real short-term effects we should think about, especially if you’re planning to launch a new private university.

So, let’s talk through all of this step by step. I’ll start by explaining what the order actually says and why Congress is such a big piece of the puzzle. Then I’ll lay out a couple of scenarios: (1) what happens if this legislation passes and the Department of Education really does fade away, and (2) what happens if it doesn’t. Finally, I’ll share my advice if you’re an investor or founder looking to seize this moment—because honestly, now might be the best chance you’ll get in a long time.

After that, I’ll include two deeper sections: a state-by-state overview (since states have a surprising amount of power, even without a national shift) and a look at some possible futures for U.S. education beyond 2026. If you’re intrigued—and maybe even excited—by the idea of creating a new university in this chaotic environment, read on.

1. Overview of the Executive Order and the Role of Congress

1.1 What the Executive Order States

In March 2025, the President signed an executive order instructing the Secretary of Education to initiate the process of dismantling the Department of Education. The specific language of the order, titled “Improving Education Outcomes by Empowering Parents, States, and Communities,” calls for a plan to significantly reduce federal involvement in education and “transfer all appropriate functions, programs, and budgets to state governments where they belong.”

Key objectives outlined in the order include:

• Identifying all discretionary (i.e., non-statutory) programs administered by the Department of Education that can be dissolved or transferred without violating existing law.
• Drafting legislative recommendations to Congress regarding how to reassign any statutory responsibilities (those mandated by federal law) to other entities, such as state governments, private consortiums, or other federal departments.
• Undertaking immediate cost-saving measures within the Department, including hiring freezes, staff reductions, and cessation of any new rulemaking that might expand federal authority over education.
• Exploring new mechanisms to enforce civil rights or consumer protection in education outside of the Department of Education, possibly by transferring certain offices or enforcement divisions to the Department of Justice or other agencies.

In short, this order signals the administration’s intent to eliminate or fundamentally reshape the U.S. Department of Education. However, one critical principle in American governance stands in the way of any swift success: Separation of Powers.

1.2 Why Congress Must Approve

The Department of Education exists because of the Department of Education Organization Act (Public Law 96-88), passed by Congress in 1979 and signed by President Jimmy Carter. This legislation formally established the ED as a cabinet-level department and endowed it with specific functions and responsibilities. By extension, the power to create a federal department rests with Congress, and so too does the power to dismantle it or change its core mandates.

An executive order is limited in scope. Presidents have broad authority to manage and direct executive branch agencies; however, they cannot unilaterally repeal or override statutes passed by Congress. Hence, while an executive order can direct immediate downsizing efforts—such as reorganizing staff, halting certain programs that aren’t legally mandated, and transferring certain internal tasks—it cannot by itself erase a congressionally established agency.

Practically, this means:

• The Department of Education cannot be shuttered until Congress passes new legislation that either (a) repeals or amends the Department of Education Organization Act or (b) de-funds the department in an appropriations bill (though even de-funding typically requires further statutory changes to reassign mandatory functions).
• Certain critical programs like federal student loans (authorized under the Higher Education Act) cannot simply vanish without legislative action. These are statutory programs whose future must be decided by Congress.

1.3 Timeline - Not Overnight!

For a bill to become law, it must pass both the House of Representatives and the Senate, then be signed by the President. Although the House may have a simple majority aligned with the President’s party, the Senate often has narrower margins, and a 60-vote threshold is typically required to overcome a filibuster (unless special reconciliation measures can be applied).

Realistically, the earliest we could see the complete dissolution of the Department of Education would be within 12–24 months of the executive order, assuming rapid legislative momentum. Even then, implementing the dismantling—transitioning programs, employees, budgets, and oversight roles to the states—would likely take an additional one to three years. If the bill becomes bogged down in committees or faces a filibuster in the Senate, the timeline easily extends further, to multiple years or possibly stalling out entirely.

During this window, the Department of Education still exists in some capacity, even if it has been administratively downsized. This means existing regulations, including those governing higher education and accreditation, remain in effect until Congress changes them.

2. Implications of Either Outcome

The future of the Department of Education hinges on whether Congress passes the necessary legislation to follow through on the President’s executive order. Let’s consider two broad scenarios:

1. Scenario A: A new law passes, and the Department of Education is dismantled (or at least drastically reorganized).
2. Scenario B: The law fails in Congress, stalls, or is effectively filibustered, leaving the Department of Education intact.

2.1 Scenario A: The Law Passes and the Department of Education is Dismantled

If Congress enacts legislation to effectively abolish or substantially reduce the Department of Education’s powers, the following major changes would likely occur over several years:

2.1.1 Full State Control Over Higher Education Authorization

Right now, to open a degree-granting institution, you must meet both federal requirements (if you want students to be eligible for federal financial aid) and state licensure/authorization requirements. Under a dismantled Department of Education, states would almost certainly gain increased autonomy over how they license colleges and universities.

• Immediate Variation Among States: Some states might relax their licensure requirements to attract new institutions, while others might tighten them to avoid being overwhelmed by low-quality “diploma mills.” Thus, as an entrepreneur, you could face dramatically different regulatory hurdles depending on the state you choose.
• Potential for Innovation: States that embrace local control might encourage more experimental or non-traditional higher education models, accelerating the rise of competency-based degrees, hybrid vocational programs, and other innovations. This could be a golden opportunity if you have a unique approach to delivering education.

2.1.2 Changes to Federal Financial Aid

Federal student aid programs—like Pell Grants and subsidized loans—are authorized primarily under the Higher Education Act (HEA). Dismantling the Department of Education does not automatically repeal the HEA, meaning Congress must address these aid programs separately. Two plausible paths could emerge:

1. Block Grant Approach: Funds for federal student aid might be converted into block grants to states. Each state would then decide how to distribute those funds to institutions or students.
2. Alternative Oversight Agency: Congress could assign student aid administration to another federal entity, possibly the Treasury Department, a new “Office of Higher Education,” or even multiple regional agencies.

Either way, the longstanding requirement that students must attend an accredited institution to access federal funds would probably remain unless Congress also revises the HEA. For new, non-accredited institutions, your students wouldn’t qualify for federal aid unless or until you secure accreditation recognized by whatever body or process ultimately replaces ED’s current role.

2.1.3 Shift in Accreditation Oversight

Currently, recognized accreditation agencies gain legitimacy (and the ability to make institutions Title IV-eligible) through ED approval. If ED is dismantled:

• The Recognition Authority could transfer to states collectively or to a different federal bureau.
• Reduced Uniformity: Each state (or a multi-state consortium) might develop its own criteria, creating a patchwork of recognized accreditors.
• Opportunity for New Models: If you’re launching a unique educational model, you could potentially lobby states or new accreditation boards to adopt standards more aligned with your mission.

2.1.4 Timeline for Implementation

Even if the law passes swiftly, implementing the dismantling will take time—at least 18–36 months, possibly longer, to reassign responsibilities. Investors must be prepared for ongoing administrative flux during which the Department still exists in a transitional form.

Bottom Line of Scenario A: A successful legislative dismantling might unleash a wave of state-centric policies that could open the door for new educational ventures, although accreditation and financial aid constraints will likely endure in some form.

2.2 Scenario B: The Law Is Blocked or Filibustered, and ED Remains Intact

A strong possibility is that the legislation needed to finalize the dismantling of ED never makes it through Congress, whether because of filibuster in the Senate, insufficient votes in the House, or other stall tactics.

2.2.1 Executive Order’s Limited Impact

Even without a new law, the President could instruct the Secretary of Education to:

• Shrink the Department by reducing staff and placing a hiring freeze.
• Eliminate or consolidate discretionary programs that do not have explicit congressional funding or statutory mandates.
• Loosen or reinterpret existing federal regulations around higher education to the extent permissible under the law.

This scenario effectively weakens the Department, but does not eliminate it. Colleges and universities still answer to ED on issues like Title IV compliance, civil rights enforcement, and accreditation recognition.

2.2.2 Federal Rules and Funding Largely Unchanged

If ED remains:

• The status quo on accreditation stands: You still need accreditation recognized by ED to make your students eligible for federal loans and grants.
• Federal oversight remains: ED continues to issue guidance, conduct program reviews, and hold institutions accountable under the Higher Education Act, FERPA, and other regulations.
• Potential for Regulatory Confusion: A partially defunded or politically undermined ED might provide less consistent guidance or slower processes, but basic rules remain in place.

Despite the uncertainty, there is no fundamental overhaul of the licensing or accreditation process in this scenario. You’d need to build your new institution under the current system, albeit one facing administrative strains.

3. What You Should Do as an Investor or Entrepreneur

Now let’s get practical. I’ve spoken with hundreds of higher-ed founders who see a unique chance here to launch a new type of university—whether it’s a niche liberal arts college, a vocational institute, a tech-lovers’ paradise, you name it. If you’re in that boat, here’s my best advice.

3.1 Seize the Moment

People sometimes shy away from starting something in the midst of regulatory turmoil. But ironically, uncertainty can create prime opportunities if you move intelligently. By the time everyone else has waited for clarity, you could be up and running.

• If States Gain More Power: You’ll be an early adopter, licensed before other schools catch wind of newly relaxed rules.
• If ED Stays But Weakens: You’ll at least benefit from a Department that isn’t eager to impose more red tape right now.

3.2 Keep a Finger on Congress’s Pulse

You don’t need to become a political junkie, but do keep an eye on the dismantling legislation’s progress. Does it pass the House? Is the Senate gearing up for a filibuster? If you’re not up for reading every piece of insider news, consider hiring a small policy-monitoring service or have a liaison who can interpret developments for you.

3.3 Understand Your Target State(s)

Regardless of what happens federally, your state licensure is paramount. Some states offer “provisional licensing” for new institutions, letting you operate for a few years while you seek accreditation. Others insist you secure accreditation (or candidate status) practically from day one. Do your homework. As you’ll see in the next section, picking the right state can mean the difference between a smooth, 6-month launch and a multi-year bureaucratic slog.

3.4 Plan for Accreditation (Eventually)

Even if your dream is to remain unaccredited, you might find it stifling that students can’t tap federal loans or grants to attend your school. You’ll also face potential skepticism from employers or grad schools about your degrees. So, from day one, consider designing your curriculum, faculty hiring, and governance structure so they can one day meet accreditation standards—whatever those look like if ED is gone or replaced.

3.5 Showcase Academic Quality Without Fed Oversight

If the Department of Education truly fades away, you’ll lose that big, uniform “federal baseline.” That means you must be your own guardian of quality and credibility. Gather a strong leadership team (including recognized academics), define clear learning outcomes, and adopt transparent assessment methods. If you develop a reputation for rigor, students and potential employers will trust you—even if you’re operating in a post-ED world.

4. State-by-State Overview

No matter what happens with the federal Department of Education, state regulations will always be a critical factor for opening a new degree-granting institution. While the federal government primarily influences accreditation recognition and Title IV financial aid eligibility, it’s generally state laws that license or charter a new college, ensuring it has the legal right to confer degrees.

States Courting New Institutions

A handful of states (e.g., Arizona and Florida) have shown an openness to new educational models—charter universities, for-profit colleges, or specialized vocational institutes. Some states actively seek to bolster their reputations as innovation hubs, offering tax incentives, expedited licensing, or even public-private partnerships to groups willing to bring cutting-edge educational offerings.

• Why They Do It: State governments recognize that attracting a new university can stimulate local economies, create jobs, and generate positive publicity.
• What This Means for You: If your institution aligns with a state’s strategic goals (e.g., producing more STEM graduates, developing healthcare workers, or providing training in emerging tech fields), you may find an enthusiastic partner at the state level.

Key Takeaway

Whether ED is dismantled or not, the state-level approach can make or break your venture. Conduct due diligence on at least three to five states to determine which offers the most balanced regulatory climate for your institutional vision. Stay updated because a state that was once highly restrictive may adapt if it senses new opportunities in a post-ED landscape.

5. Futures Scenarios: 2026 and Beyond

The fate of the Department of Education—and the shape of U.S. higher education generally—will not be resolved overnight. However, by 2026 and beyond, we may see significant shifts in how colleges are authorized, accredited, and funded. Below are three possible futures and how a new university might adapt and thrive in each.

5.1 Scenario 1: States Form Regional Accreditation Compacts

In this future, the Department of Education has been dismantled, or greatly diminished, and Congress passes laws that encourage states to collaborate on education standards. With no single federal body overseeing accreditation, groups of states band together to create regional accreditation compacts. These interstate agreements:

1. Establish multi-state accreditation agencies that recognize institutions meeting a shared set of quality criteria.
2. Streamline student financial aid eligibility within these compact states, allowing students to move freely among member institutions.
3. Standardize degree requirements, credit transfers, and institutional accountability measures across a region.

Opportunities for a New Institution:

• By joining one of these compacts, you gain multi-state recognition without having to navigate drastically different rules in every single state.
• You can recruit across state lines with relative ease, as there is a common set of accreditation standards.
• The brand prestige of being “regionally accredited” by a recognized multi-state body can help reassure students and employers even if the U.S. Department of Education no longer exists.

Challenges:

• Gaining entry to a compact’s accreditation might still require rigorous vetting. If you operate in a more lenient state, you still need to meet the compact’s baseline standards.
• Variation among compacts: the Southeast might have different criteria than the Pacific Northwest, so if you want national reach, you may end up needing multi-compact approvals.

5.2 Scenario 2: Private Accreditation Proliferates with Minimal State Input

Another possibility is that Congress fails to pass any comprehensive legislation to replace federal accreditation oversight, and states only loosely coordinate. Consequently, a free market of accreditors emerges—some well-respected and thorough, others questionable:

• Entrepreneurs may start or sponsor new accrediting bodies with specialized standards, e.g., for tech bootcamps, creative arts academies, or religious education.
• States vary widely in which accreditors they recognize. A few states adopt strict rules (no Title IV funds unless recognized by a “legacy” accreditor from the pre-dismantling era), while others are comfortable with lesser-known agencies.

Opportunities for a New Institution:

• You can shop around for an accrediting organization whose philosophy aligns with your institution’s mission—be it classical liberal arts, career-focused education, or experimental pedagogies.
• If your target market (students and employers) values a certain private accreditor’s seal of quality, you can secure that approval more rapidly than under a monolithic federal system.

Challenges:

• Students and employers may be confused by the explosion of different accreditation seals. Ensuring legitimacy and wide acceptance for your accreditor’s stamp might be an uphill battle.
• States could adopt conflicting rules, forcing you to comply with separate accreditation recognitions if you want to operate or recruit students across multiple jurisdictions.

5.3 Scenario 3: A Partial Federal Framework Remains or Emerges

A third scenario envisions a compromise in Congress, wherein the Department of Education is restructured (not fully dismantled) to reduce its scope but still play a central role in:

• Financial Aid Administration: Possibly moved under a new umbrella agency or scaled-down ED office.
• Minimum National Standards: A skeleton set of rules ensuring any accredited institution meets baseline consumer protection requirements.
• Data Collection & Civil Rights Enforcement: Federal oversight remains for essential consumer protection, Title IX, and anti-discrimination mandates.

Under this compromise scenario, states have more autonomy in licensing but must still conform to minimal federal guidelines to participate in student aid programs.

Opportunities for a New Institution:

• The smaller ED might be less restrictive in day-to-day operations and more open to alternative models, while still providing nationwide credibility when you’re recognized as meeting a standard threshold of quality.
• Students across the country continue to rely on a federal aid pipeline, ensuring broad enrollment potential for your school if you choose (and qualify) to receive Title IV funds.

Challenges:

• A partially reformed ED might still be slow to adapt or update regulations, leading to bureaucratic friction.
• The interplay between state innovation and federal baseline standards could be complicated—some states might interpret the new national requirements differently, leading to patchwork compliance burdens.

How a New Institution Might Thrive

In each of these futures, new universities can succeed by balancing innovation with credibility:

1. Quality Assurance: Whether it’s a regional compact or a private accreditor, you must show you meet transparent, verifiable academic standards.
2. Targeted Niches: Specialize in a field or format that sets you apart—STEM, cybersecurity, healthcare, or even unique liberal arts curricula—to stand out among a likely surge of new entrants.
3. Flexible Financing Options: If federal or state grants are inconsistent, develop scholarship programs, employer partnerships, and creative tuition models (income share agreements, for instance) to attract students who lack federal loan access.
4. Adapt Fast: Stay plugged into emerging standards or compacts, forging relationships with accreditors that align with your institutional values. Being nimble in a fluid regulatory environment is key to capturing market share.

The Bottom Line: Whether it’s regional compacts, private accreditation, or a partial federal framework, the post-2025 system will reward institutions that combine student-centered quality with strategic navigation of multiple regulatory bodies. Early adopters who invest in robust academic infrastructures and cultivate a strong reputation should be positioned to thrive, even in a mosaic of accrediting authorities.

Closing Thoughts

I’ve talked to so many founders who feel torn between the dream of building a truly unique university and the fear that the regulatory rug might be pulled from under their feet. My advice is always the same: if you do your homework, build responsibly, and keep a close eye on both state and federal shifts, you can navigate these waters successfully. Sure, it’s not a tiny endeavor—launching a college is big, complicated work—but the potential impact is huge.

That’s it from me—thanks for reading my take on this wild moment in education history. If you’ve got questions or want to share your own experiences, I’d love to hear from you. Together, we might just shape the future of American higher ed for the better. Good luck!

For personalized guidance on opening your university in the United States, contact Expert Education Consultants (EEC) at +19252089037 or email sandra@experteduconsult.com.‍