WASHINGTON, D.C. – Consumer Bankers Association (CBA) President and CEO Lindsey Johnson this week penned an op-ed in U.S. News and World Report highlighting the forthcoming changes to the graduate student lending market and urging need to restore balance, accountability, and transparency. The op-ed follows a recent white paper that CBA published on the topic.
Johnson explained how recent legislative changes created a path that better protects students, encourages responsible lending, and aligns incentives across institutions. But she also emphasized that additional work, from a wide range of stakeholders like colleges and state governments, is needed to help ensure that graduate education acts as a launchpad — not a lifelong liability:
“The changes coming are intended to inject market-driven solutions and discipline, where to date, there has been little if any. That reality means students must be more discerning, schools must rethink pricing, and families should ask hard questions about the value of each degree program. The result is a renewed need for a broader conversation, for borrowers and lenders alike, on the value of education: What will the degree cost? What is the expected earnings potential? And how likely is repayment?”
To read the full op-ed, click HERE or keep reading below:
Graduate Education Should be a Launchpad, not a Liability.
By Lindsey Johnson
U.S. News and World Report
Feb. 4, 2026
As families gather in the coming weeks for spring break campus visits, admitted-student weekends and those long kitchen table conversations about “what’s next,” many households are weighing college and graduate school decisions. Acceptance letters bring pride and possibility – but they also bring a financial reality check that often arrives far too late in the process.
For years, we have rightly emphasized the value of education: its ability to expand individuals’ skills and strengthen the overall economy. But promoting the value of education without confronting its rising cost has left millions of Americans with federal student loan debt and created a public policy dilemma. Graduate education costs have become unsustainable. A 2024 Brookings Institution report found that the price of master’s programs has increased 158% since 1993. Americans now owe $1.83 trillion in student loans, with federal loans comprising more than 90%.
Too many borrowers finish their programs and ask: “Will I ever earn enough to make this investment worthwhile?”
In response to these rising costs and untenable student debt totals, Congress recently voted to eliminate the federal Grad PLUS loan program for new borrowers beginning in July.
At first glance, removing a student loan option may seem counterintuitive. But this change is best understood as necessary, if uncomfortable, medicine.
For years, Grad PLUS loans allowed students to borrow up to the full cost of attendance, with no underwriting to assess whether they could realistically repay. In other words, the program removed a core feature of any functioning credit market: risk-based pricing and lending discipline.
Colleges understood this. So as long as students could access unlimited federal debt, colleges faced little incentive to control tuition prices. And because of this lack of market discipline, borrowers had little ability to push back in a system where the price tag was effectively “financeable” no matter how high it climbed – all backed by Uncle Sam. The result was not surprising: Graduate degree costs skyrocketed.
Grad PLUS loans may have looked like a gift to students. But these were not grants. They were real loans with real consequences. Student debt is difficult to discharge in bankruptcy, often impacts family co-signers and now exceeds what Americans owe on cars or credit cards. It is not responsible to offer students debt they are statistically unlikely to repay. And it is unsustainable. The impacts reach beyond just the individual borrower: The Congressional Budget Office estimates that taxpayers lose about 25 cents for every dollar lent through Grad PLUS.
After the changes, colleges will hopefully lower their tuition costs. But this shift won’t happen overnight.
In the meantime, students considering graduate school face a critical question: How do you finance the future wisely? Banks will compete to offer competitive private loans, but they cannot absorb the kinds of losses the government sustained under Grad PLUS. That means pricing loans according to risk or, when the data is clear, declining to make a loan in the first place.
The changes coming are intended to inject market-driven solutions and discipline where to date there has been little if any. That reality means students must be more discerning, schools must rethink pricing, and families should ask hard questions about the value of each degree program.
The result is a renewed need for a broader conversation, for borrowers and lenders alike, on the value of education: What will the degree cost? What is the expected earnings potential? And how likely is repayment?
For students considering graduate programs:
- Look at your expected return on your investment. Use tools like College Scorecard to see median earnings for alumni of your specific program.
- Examine repayment outcomes. Do graduates from your program typically repay their loans, or do many struggle?
- Compare total financing options. There’s going to be a private market for student lending – make lenders compete for your business.
A recent white paper from the Consumer Bankers Association, where I serve as president and CEO, shows that the private market should be able to support a majority of borrowers who would have otherwise received a Grad PLUS loan, but gaps in what the private sector can offer and who they are able to underwrite compared to subsidized government loans remain.
To inform this research, CBA convened a roundtable of government, private-lender and nonprofit stakeholders last month to identify reforms that can reduce the cost of graduate school, encourage prudent lending and better protect taxpayers. Participants discussed the need for better data to support underwriting, clearer rules for using program-level earnings without triggering discrimination concerns and steps colleges and states could take – such as grants or lower tuition – to close the remaining gaps.
While the policy gears shift and institutions adjust, students can still take proactive steps: Talk with financial aid offices, review realistic post-graduation outcomes and build a repayment plan before borrowing.
As families weigh big decisions in this season of acceptance letters, let’s ensure we’re sending a clear message: Your future is worth protecting. When we bring cost, value and accountability back into balance, graduate education becomes what it should be – a launchpad, not a liability. That’s the kind of promise we owe the next generation.