The End Of Education As We Know It?

In this installment of our series examining Project 2025’s potential impact on corporate governance, finance, and human capital, we focus on its proposed elimination of the Department of Education (DOE). While framed as a move to return control of education to the states, this shift could have far-reaching consequences for employers and the workforce, both today and in the future. Understanding these potential changes is crucial for businesses preparing for an evolving labor landscape.

Dismantling the Department of Education – What’s at Stake?

The Heritage Foundation’s Project 2025 outlines a blueprint for dismantling the DOE, arguing that education should be entirely state-controlled and free from federal oversight. However, the NEA claims it would devastate public education. (Read more about the DOE’s history in a previous Forbes column.) Among Project 2025’s proposals:

• Eliminating Federal Student Aid Programs: Pell Grants, federal student loans, and loan forgiveness programs would be cut, shifting the burden of financing higher education entirely onto individuals and private institutions.
• Privatization and School Choice Expansion: The plan promotes voucher programs and charter schools while reducing funding for public K-12 education, potentially increasing disparities in education quality across states.
• Elimination of Federal Workforce Training Grants: Programs supporting vocational education and adult workforce retraining would no longer receive federal funding, leaving businesses to fill skill gaps on their own.
• Defunding DEI and Workplace Readiness Programs: The proposal aims to eliminate initiatives promoting diversity, equity, and inclusion (DEI) in education, which may impact the talent pipeline for employers focused on fostering diverse and innovative workforces.

Who Will Be Hurt If the DOE Is Eliminated?

According to the think tank, Century Foundation, the elimination of the DOE will harm a broad range of individuals and organizations.

• College Students, Including Diverse Populations and White Men Equally: The elimination of federal financial aid will disproportionately impact students from lower-income backgrounds across racial and gender lines. While students of color have historically relied on federal financial aid at higher rates, white men also make up a significant portion of student loan and Pell Grant recipients. Without these financial supports, both groups will face significant challenges in accessing and affording higher education, leading to a shrinking talent pool across all industries.
• Businesses Needing a Skilled Workforce: Without federal support for education, companies will struggle to recruit workers with the necessary skills. Industries that depend on technical expertise, such as STEM, healthcare, and finance, will face acute shortages.
• Unemployed and Low-Income Individuals: The elimination of workforce retraining programs will leave many job seekers without pathways to gain new skills, worsening employment prospects and economic inequality.
• Public School Students and Teachers: Federal funds support special education, rural schools, and low-income districts. Losing this funding could lead to teacher layoffs, larger class sizes, and fewer educational resources.
• Rural and Underserved Communities: Many small towns and economically disadvantaged regions rely on federal education support for broadband access, transportation, and teacher recruitment. Losing DOE funding will further disadvantage these areas.

Preparing for Project 2025 – Actionable Steps for Companies

Human Capital Practitioners will need to rethink recruitment and retention strategies in response to a shrinking and underprepared talent pool. Without federal workforce training initiatives and student financial aid, companies may see fewer qualified applicants for skilled roles, particularly in technical and knowledge-based industries. To prepare, practitioners should:

• Invest in Internal Training and Upskilling: Companies will need to increase investment in workforce development programs, including apprenticeships, on-the-job training, and tuition reimbursement initiatives.
• Expand Partnerships with Educational Institutions: Collaborating with local community colleges, trade schools, and private institutions can help bridge skills gaps through customized training programs.
• Enhance Employee Value Propositions: With fewer college-educated job candidates, HR leaders should refine benefits packages, career progression opportunities, and other incentives to retain top talent in a more competitive labor market.

Financial Implications – Rising Costs and Economic Uncertainty

The elimination of the DOE will place increased financial pressure on both businesses and employees. Without federal support, the cost of educating and training the workforce will shift to private employers, making it more expensive to maintain a competitive edge. Companies must:

• Plan for Higher Training and Development Budgets: The cost of workforce development will rise as companies take on responsibilities once managed by federally funded education programs.
• Assess the Long-Term Impact on Labor Costs: As skills shortages intensify, businesses may need to offer higher wages or sign-on bonuses to attract and retain qualified employees.
• Adapt Compensation Strategies: Organizations should explore more flexible compensation structures, including performance-based incentives and non-traditional benefits, to mitigate the financial burden on employees who face rising education costs.

Corporate Governance Considerations – Addressing Workforce Risks and Compliance Challenges

For board members and corporate governance leaders, the elimination of the DOE presents new compliance and operational risks that must be managed proactively. Companies must:

• Incorporate Workforce Readiness into Risk Management Plans: Workforce shortages and skill gaps should be factored into enterprise risk assessments, with strategies to address potential labor shortages.
• Ensure Compliance with Changing Labor Laws: Shifting education policies may introduce new workforce compliance challenges at the state level, requiring more vigilant legal oversight.
• Enhance ESG and Social Responsibility Strategies: With educational inequities expected to widen, companies committed to Environmental, Social, and Governance (ESG) principles should consider taking a more active role in education initiatives, such as scholarship programs and school partnerships.

Conclusion

The elimination of the Department of Education would fundamentally alter the relationship between education and the workforce, shifting the responsibility for workforce development from the government to private industry. HR leaders, financial professionals, executive teams and board directors will need to address widening skills gaps. There will be an expected rising training costs, and corporate governance professionals will navigate a more fragmented labor landscape.

While Project 2025 proponents argue that decentralizing education will improve efficiency, the reality for businesses is clear: the absence of federal oversight and funding will create new risks and costs that corporate leaders cannot afford to ignore. The question is not whether companies should prepare for this potential reality — it is how soon they must act to safeguard their workforce and long-term viability.

For a more in-depth analysis of Project 2025’s implications, you may refer to my previous columns on this topic (forbes.com).