U.S. Senator Mazie K. Hirono, along with several Senate colleagues, has released a report detailing how private student loan lenders are positioned to benefit from recent federal student loan restrictions under the Republicans’ ‘Big, Beautiful Bill’ (OBBBA). The investigation is the first Congressional analysis examining how these changes could affect the private lending market.
The report found that new caps on federal student loans for graduate students and others are likely to lead more students toward private loans. Currently, private lenders account for about 8% of total student loan debt but make up over 40% of complaints submitted to the Consumer Financial Protection Bureau.
“This report makes it even more clear that by placing an arbitrary cap on federal student loans, President Trump and his Republican allies are making it more expensive for everyday students to pursue higher education. Why? To support huge tax breaks for themselves and their billionaire buddies,” said Senator Hirono. “Students should be able to pursue higher education without taking on a lifetime of debt. I will continue to do everything in my power to ensure that we put an end to abusive practices that exploit borrowers, to institute further consumer protections, and to prevent companies from cashing in on this regime’s political agenda.”
Senator Hirono represents Hawaii in the U.S. Senate as its first Asian American woman senator and the state’s first female senator. She has focused her work on supporting veterans, servicemembers, immigrants, minorities, and underserved communities while serving on committees such as Armed Services and Judiciary according to her official website.
The senators contacted six major private lenders—Citizens, College Ave, Navient, Nelnet, Sallie Mae, and SoFi—which together issued over $14.7 billion in private student loans in 2024—to request information about their policies and future plans related to OBBBA.
Key findings from the investigation include:
– A pattern of predatory behavior persists among private lenders.
– Lenders expect increased demand due to new federal loan limits; at least one is planning expanded offerings.
– Most surveyed lenders provide limited protections for borrowers defrauded by schools or affected by sudden closures.
– Half have sold or plan to sell student loans to private equity firms.
– Lenders lack concrete plans for expanding customer service if loan activity rises.
“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 the report.
They also warned: “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.”
In response to these findings, lawmakers called for increased oversight over new private loan products targeting those affected by federal caps and urged experts to study potential impacts if loans are sold 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,” they concluded.
Senator Hirono also assists constituents with issues involving federal agencies such as Social Security claims or veterans benefits (source). She immigrated from Japan as a child with her family (source) and holds degrees from both University of Hawaii at Manoa (Phi Beta Kappa) and Georgetown University Law Center (source).
The full text of the senators’ report is available online.
