The Education Department gave another agency power to distribute its money. It hasn't gone well.

A controversial push to restructure the Education Department under the Trump administration has faced significant setbacks, raising questions about the feasibility of broader reforms. Early efforts to reorganize the agency’s oversight of student loan programs and other key functions have encountered resistance, potentially weakening the momentum behind more sweeping changes. Critics argue the missteps could delay or derail plans to reshape federal education policy, leaving the department’s future uncertain. The Labor Department’s involvement adds another layer of complexity to the debate over how best to streamline—or dismantle—education-related bureaucracies.

The stumbles of an early Trump administration experiment to carve up the Education Department risks undercutting the president’s more dramatic demolition plan for the agency. The Labor Department ...