Merkley, Wyden, Colleagues Release Report of How Private Student Loan Lenders Expect to Profit from Trump’s Big Ugly Bill

Oregon’s U.S. Senators Jeff Merkley and Ron Wyden joined a group of Senators in releasing a new report of their investigation into how private student loan lenders will reap the benefits from cuts to federal student loan access enacted in Republicans’ One Big, Beautiful Bill Act (OBBBA). The report was led by Senator Elizabeth Warren (D-MA), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, and is the first congressional analysis of the impacts of the OBBBA’s student loan restrictions on the private lending market.

“The Republican vision of ‘Families Lose, Billionaires Win’ is leading to less affordable student loan repayment options and a higher risk of folks falling victim to predatory lending, which overwhelmingly harms working families,” said Merkley. “As private lenders prepare to cash in on this disastrous agenda, our report makes clear that urgent oversight is needed to protect borrowers and ensure they can access affordable higher education for generations to come.”

Link to report “Costly consequences: how the Trump administration unleashed private student loan lenders”

“This report shows in painful detail how Donald Trump and his Republican groupies in Congress deserve a big F for their economic assault on students working hard for a fair shot at an education,” said Wyden. “Predatory private student loans plus worse loan repayment terms produced by this Republican bill add up to financial abuse that demands congressional oversight.”

Republicans’ OBBBA set new caps on federal student loan borrowing for graduate students and others, paving the way for a significant expansion of the private student loan market. The private student loan market currently accounts for approximately 8 percent of student loan debt, but represents more than 40 percent of student loan-related complaints submitted to the Consumer Financial Protection Bureau. The Senators pressed six major private student loan lenders, Citizens, College Ave, Navient, Nelnet, Sallie Mae, and SoFi—which, combined, lent over $14.7 billion via private student loans in 2024—to provide details on their policies, lending activity, and future plans related to OBBBA. The investigation found that:

There is a history of persistent predatory behavior in the private student loan market, and major lenders have been expanding their student loan activity each year;
Private student loan lenders expect more students to turn to private loans due to OBBBA’s loan limits, and at least one lender is already making plans to expand its loan offerings in response to this policy change;
Most of the private lenders surveyed offer minimal protections for borrowers who are defrauded by their schools or who face a sudden school closure;
Half of the private lenders surveyed either have sold student loans to private equity firms or plan to do so in the future; and
Private lenders do not yet have concrete plans in place to expand customer service capacity if they increased their student loan activity.

“The anticipated expansion of the role of private lending is deeply concerning, since private student loan lenders have a long record of predatory practices that raise costs for borrowers and deprive them of basic consumer protections,” wrote the Senators in their report.

“Private student loan lenders have a record of utilizing abusive practices, including lying to borrowers about the availability of debt cancellation, autopay discounts, and unemployment protections for borrowers,” the Senators warned.

In response to the findings, the Senators called for careful oversight of any new private loan offerings targeting students and families affected by the federal loan caps and for experts to examine potential impacts of private lenders selling student loans to private equity firms.

“One year into the Trump Administration, President Trump and Secretary McMahon have made countless efforts to strip federal support from student loan borrowers as part of their crusade to dismantle the Department of Education…[These findings] underscore an urgent need for oversight of the private lending market as these companies prepare to cash in on the Administration’s agenda,” the Senators concluded.

Warren, Merkley, and Wyden were joined in releasing the report by Democratic Leader Chuck Schumer (D-N.Y.); U.S. Senators Bernie Sanders (I-Vt.), Ranking Member of the Senate Health, Education, Labor and Pensions Committee; Richard Blumenthal (D-Conn.); Mazie Hirono (D-Hawaii); Chris Van Hollen (D-Md.); and Ed Markey (D-Mass.).

This story is based on submitted information and has not been verified by our news team.