The Big Beautiful Bill is set to upend student lending starting July 1, 2026, with changes to everything from loan amount caps to repayment options to program availability.
In this episode, John Volpini, VP of Relationship Management at Sallie Mae, draws on his decades of industry experience to explain how these changes will affect the private student lending market — and how credit unions can seize the opportunity.
Key Takeaways
01:35: DOGE cuts eliminated around half of FSA's staff, leaving schools stressed and under-guided as they race to implement major loan reforms by July 1st.
05:14: Grad PLUS eliminated, Parent PLUS capped at $20K/year, and graduate loans now have hard lifetime limits — John ranks this second only to the 2010 federal takeover in significance.
08:50: Federal PLUS loans carry a 4.266% origination fee that inflates the true APR, meaning top-tier credit borrowers will frequently find private loans equal to or cheaper — something most families don't know.
15:26: The Bill cuts $8–10B in annual federal loan volume, with approximately $1.2B shifting to private lending in 2026 and growing to $5.2B over three years — capacity the market can handle.
18:01: Unlike undergrad loans (90% co-signed), John expects 60–70% of graduate private loans to be unsupported, improving approval rates as better-credit grad students enter the private market for the first time.
21:05: For the first time, Pell Grants will cover workforce and trade programs — a move John sees as positive, reinforcing his longstanding advice: free money first, federal second, private gap financing third.
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