- Trump's changes to student-loan repayment include new borrowing caps for advanced degrees.
- Private lenders said on earnings calls that the federal changes could bring more borrowers to the private industry.
- Borrowers could also choose to forgo graduate programs due to anticipated limited federal financing.
Private student-loan companies are gearing up for a big year ahead.
President Donald Trump's administration is preparing to roll out its sweeping student-loan repayment changes beginning in July. Those changes include new repayment plans and caps on federalborrowing for advanced degrees.
Some companies see those changes as an opportunity for the private lending industry. During an earnings call last week, Jonathan Witter, the CEO of lender Sallie Mae, said that the company is "excited about the opportunity created by the recent federal student lending reforms."
"These changes should reduce the likelihood of students and families taking on unsustainable levels of student debt," Witter said. "These reforms also create the opportunity for us to help more students and families."
Trump's "big beautiful" spending legislation eliminates the Grad PLUS program, which allowed graduate students to borrow up to the full cost of attendance for their programs. The legislation also imposes new borrowing caps for graduate and professional students: $20,500 for graduate students and $50,000 for professionals, such as those in medical or law school.
Witter said the company expects those changes to bring in an estimated $5 billion in annual loan originations. Navient's CEO, David Yowan, expressed similar sentiment during the company's earnings call this month. He said that the changes to Grad PLUS are an "opportunity" for the company to expand, saying that "there's a lot of room for growth" this year.
Private lenders have been anticipating these repayment changes for months. Yowan said during an August 2025 earnings call that eliminating the Grad PLUS program is "a substantial and significant expansion of opportunities that we have with graduate students." SoFi's CEO Anthony Noto said at the time that the repayment changes could lead to "further opportunities for in school lending and student loan refinance."
While private lenders anticipate boosts to their businesses from Trump's repayment overhaul, some critics and borrowers are concerned. Borrowers could choose to forgo their programs entirely due to more limited federal financing, and if they turn to private lenders, they would lose out on federal debt relief and forgiveness.
Sara Partridge, associate director for higher education policy at the left-leaning think tank Center for American Progress, previously told Business Insider that private student loans could also have higher interest rates than federal loans, leaving borrowers with more unaffordable debt.
"Private student loans often require a cosigner, so some students may not qualify, and they may have no options to fully finance and attend graduate school. So there is a possibility that for some students, this will be a barrier to accessing graduate school," Partridge said.
Still, the Trump administration said the reforms are intended to curb excessive borrowing and increase accountability in the federal system.
"We are building a future where higher education works for everyone, where students are empowered to succeed, where taxpayers can trust that their investments will be used wisely, and where institutions are held accountable for delivering results," Undersecretary of Education Nicholas Kent said in a January statement.
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