Private Lenders See Surge After Trump Student Loan Overhaul
Private lenders reported massive growth in graduate loan originations after President Donald Trump eliminated the Grad PLUS program and capped Parent PLUS loans.
Private student lenders experienced a significant surge in graduate loan originations during the third quarter of 2026. This growth follows a federal repayment overhaul implemented by Donald Trump, which eliminated the Grad PLUS program and placed caps on the Parent PLUS program, leaving funding gaps for students.
Sallie Mae reported a 119% increase in graduate lending, while Navient saw a 173% increase. SoFi also reported a 96% rise in student-loan originations, driven by borrowers seeking to refinance federal debt for lower interest rates. While these private options may offer lower rates for qualified borrowers, they do not include federal protections such as Public Service Loan Forgiveness or income-driven repayment plans.
Democratic lawmakers, including Senator Elizabeth Warren, have criticized the administration's policy changes. Warren argued that the overhaul allows predatory private lenders to profit from American families rather than focusing on lowering costs for students and borrowers.
