Big changes could be coming for student loan borrowers
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Trump is expressing something between anger and exasperation this morning. Players in financial markets are adopting the view that it is a less risky situation today. Crude oil is down 4.7 percent, 65.29 a barrel in New York. The stock market is open and higher. The Dow is up 361 points, nine-tenths percent. The S&P also up nine-tenths percent. The Nasdaq in early trading up 1.2 percent.

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This round, he has a nickname for the Strait of Hormuz. It's the Strait of Hyperbole because people will invoke it as a reason why crude should go to $100. I think that without all of this nonsense in the Persian Gulf, we're looking at $50 more likely down the road.

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And there's quite a bit of production that basically is coming online in 2025, 2026. In Guyana, Brazil, Kazakhstan. On top of that, OPEC is bringing more supply into the market. Which is why he says prices are likely to crater if this conflict eases. I'm Elizabeth Troval for Marketplace.

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The big tax and spending legislation currently in the Senate proposes saving money by cutting access to student loans. Among the provisions, reducing the number of repayment options. While this would make monthly payments higher for borrowers, Senate Republicans estimate it would save the Treasury $300 billion. Also proposed, limits on how much students and families could borrow. Marketplace's Samantha Fields has that.

Today, if you or your kids get into college or grad school and you don't have the money to pay for it, which most people don't, you can borrow however much you need from the federal government to cover tuition and living expenses.

But if the legislation currently working its way through Congress passes, that won't be the case anymore. I don't think it can be overstated how significant these changes would be and how impactful they will be for borrowers. Adam Minsky, a lawyer who specializes in student loans, says the bill would cap the amount of money parents of undergraduate students could borrow from the federal government.

Currently, they can take out as much as they need to help their kids pay for college. The House bill would limit that to $50,000 total. The Senate version would cap it at $65,000 per kid. Which may sound like a lot, but it's often not enough to cover, you know, four years of an undergraduate college education. Especially for low-income students and their families.

Persis U, managing counsel at the Student Borrower Protection Center, says it's likely many won't be able to get enough federal financial aid to pay for school. These students are going to be forced to turn to the private student loan market. And those loans tend to be much more expensive. And that's if they can even get private loans. They also come with pretty onerous credit background checks, which means that some people just won't qualify.

The bill would also put limits on how much students can borrow for graduate school, between $100,000 and $200,000 total, depending on the program.

which again may sound like a lot, but isn't enough to cover the cost of certain degrees. If you go to law, medical, or business school, Adam Minsky says it's easy to rack up several hundred thousand dollars in loans. It's a big financial risk, obviously, to take on that level of debt, but a lot of people can do it given the availability of federal programs such as income-driven repayment programs and public service loan forgiveness programs.

Unlike federal loans, private student loans do not offer any income-based repayment options or paths to loan forgiveness. I think that we're going to see drops in enrollment. I think fewer people will pursue getting a degree. And I think that we're going to start seeing shortages in certain occupations. He expects eventually many people will be unwilling or unable to become primary care doctors, public defenders, or social workers.

Beth Akers at the American Enterprise Institute agrees these new limits on borrowing will likely mean fewer people get certain degrees and go into some public service jobs.

On the other hand, it also protects them from taking on debts that we know, empirically speaking, are going to be unaffordable. I don't think making unlimited debt available is the right solution. There's no question higher education has become increasingly unaffordable, says Persis Yu at the Student Borrower Protection Center. And there is no question that the student loan system is broken.

But these proposals are not actually addressing the cost of education. Instead, she says they're limiting students' access to it. I'm Samantha Fields for Marketplace. And in Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report from APM American Public Media.

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