Trump's student-loan repayment overhaul could push borrowers out of the federal system. Democratic lawmakers want to know if private lenders are ready.

The Trump administration's overhaul of student-loan repayment, involving caps on graduate borrowing and condensed income-driven repayment plans, may drive borrowers from federal to private lenders. Democratic lawmakers, including Senator Elizabeth Warren, have raised concerns about the potential influx into private markets, where terms are often harsher and interest rates higher. They have reached out to major private lenders like Navient and Sallie Mae for information on their practices. The shift could exacerbate existing issues of borrower debt burden and financial health consequences.

"Student debt places a tremendous burden on borrowers, their families, their communities, and the U.S. economy, driving employment, spending, and housing decisions that have long-lasting negative impacts on borrowers' financial health."

"Placing a greater share of student loans into the hands of private lenders threatens to make these problems much worse."

Read at Business Insider