This bill, titled the "Orderly Liquidation of the Department of Education Act," proposes to terminate the Department of Education (DoE) by October 1, 2026. Its stated purposes are to liquidate the DoE, return the responsibility and authority of educating students to states and local communities, and eliminate unnecessary federal regulation. Congress finds that despite the DoE's 45-year existence, education in the United States has not improved, and the department has failed to supplement state and local efforts while promoting policies that strip local control.

Upon enactment, the President must develop a plan within 180 days for the orderly liquidation of the DoE, detailing the termination of its functions, transfer of administrative responsibilities, and disposition of assets. A new Office of Education will be established within the Department of Health and Human Services (HHS), led by a Director, to assume many federal education functions, including those related to individuals with disabilities and elementary and secondary education grants.

Key DoE functions will be transferred to various other federal agencies. Student financial aid programs, such as Pell Grants and the William D. Ford Federal Direct Loan Program, will move to the Department of the Treasury. The Institute of Education Science will transfer to the new Office of Education, and the Office for Civil Rights will be transferred to the Department of Justice. Other functions will be distributed to agencies like the National Science Foundation, the Bureau of Indian Education, the Department of Defense, and the Department of Labor.

The bill also mandates the scheduled termination of certain education funds, ending expenditures for some Elementary and Secondary Education Act (ESEA) Title I programs after October 1, 2036. Additionally, the authority to make new Federal Direct PLUS Loans will terminate for periods of instruction beginning on or after October 1, 2026, with a limited grace period for current borrowers. Recipients of transferred funds will retain the option to decline them.