A new report shows how Trump's sweeping student-loan changes are poised to reshape repayment for borrowers and private lenders

• Trump is overhauling student loans this year, and it's expected to benefit private lenders.
• A new report shows how six major private student-loan lenders are expecting an influx of federal borrowers.
• Democratic lawmakers said they're concerned about minimal oversight for student-loan borrowers.

The private lenders have spoken — and they're expecting a good year ahead in the student-loan industry.

That has Democratic lawmakers concerned.

Sen. Elizabeth Warren and a group of her colleagues released the first congressional analysis of the impact of the coming changes to federal student loans on the private lending market. The report — exclusively viewed by Business Insider — compiled new information provided by six lenders, detailing how they are preparing for an anticipated influx of borrowers into the private market.

That anticipated influx is driven by changes that President Donald Trump signed into law in his "big beautiful" spending legislation. They included the elimination of the Grad PLUS program, which allowed graduate students to borrow up to the full cost of attendance, and new borrowing caps for graduate and professional students.

The report found that some lenders are already making plans to expand their loan offerings in response to the federal changes. In addition, some lenders reported selling their student loan portfolios to private equity firms or plan to do so in the future, raising concerns about consumer protections for those borrowers.

The lawmakers wrote in the report that their findings "underscore an urgent need for oversight of the private lending market as these companies prepare to cash in on the Administration's agenda."

Here are the main findings of the report, based on responses from lenders Citizens, College Ave, Navient, Nelnet, Sallie Mae, and SoFi.

How private lenders are expanding their student-loan business

Most private lenders reported expanding their portfolios over the past few years. Four of the five lenders who disclosed how much they have lent to borrowers saw increases; for example, SoFi's 2024 lending portfolio stood at $3.8 billion, up from 2.2 billion in 2022, Sallie Mae's 2024 portfolio stood at $7 billion in 2024, up from $6 billion in 2022, and College Ave saw a 71% increase since 2022, standing at $2.48 billion in 2024.

Most of the lenders said in their responses that the elimination of the Grad PLUS program and new borrowing caps will continue to bolster their growth this year. College Ave, for example, said in its response that it recognizes "that changes to the federal student loan program are likely to cause student borrowers to seek alternate sources of funding, and College Ave stands ready to assist those borrowers and its existing customer base consistent with its standards."

Navient said in its response that it "will work diligently and responsibly to respond to that additional demand," and Citizens said that it will work to "improve access to those borrowers who previously would have sought a Grad Plus loan."

Nelnet wrote in its response that it has "very insignificant" private loan operations, servicing 5,100 borrowers since 2022. It said that it's confident it can maintain its customer service operations for borrowers should its portfolio expand.

In response to the data, the lawmakers wrote in their report that they're concerned about the expansion because "private lenders will no longer have to compete against federal loans for borrowers who have already met the new graduate loan caps."

"Without that competitive pressure, lenders have far less of an incentive to provide borrowers with loans on terms that are commensurate to those of federal loans, such as by offering comparable interest rates or protections for borrowers who become permanently disabled," they wrote.

Selling student loans to private equity

Some private lenders have sold off loans to private equity firms. It's a practice that allows lenders to free up funds and reduce exposure to default, but lawmakers said they're concerned about private student loans being sold off because of the risks they pose to borrowers. For example, the lawmakers cited some instances where private equity firms engaged in aggressive debt collection practices.

For example, Navient reported selling $1.2 billion worth of loans to private equity over the past decade, and Sallie Mae previously announced a partnership with private equity firm KKR. SoFi said in its response that it has previously sold loans to "third-party investors" and does not have "specific future plans related to the private equity industry."

The lawmakers cited some instances where private equity firms engaged in aggressive debt collection practices and called for increased oversight over those transactions to prevent student-loan borrowers from facing predatory behavior.

Protections for student-loan borrowers

The private lenders said they're committed to helping borrowers experiencing financial hardship. Sallie Mae, for example, said that its customers typically face "the highest periods of repayment stress" in their first 12-24 months of repayment, and it offers grace periods and forbearances depending on the borrower's circumstances.

Additionally, SoFi said it offers "many options" to borrowers to avoid delinquency, including payment grace periods and programs for long-term financial hardship, disability, and disasters.

It's become more difficult for the federal government to conduct oversight on the lending industry after the Trump administration gutted the Consumer Financial Protection Bureau. While many lenders said they have evaluated previous complaints received by the CFPB, a decrease in oversight could make it more difficult to evaluate borrowers' concerns.

Ellen Keast, Press Secretary for Higher Education, said that the Trump administration is "reining in the out-of-control student loan borrowing bonanza that encouraged institutions to inflate tuition and allowed students to take on absurd levels of debt, sometimes borrowing beyond their means to repay."