Main Street Ledger: Graduate Education Should Be a Launchpad, Not a Liability
A major change in graduate student lending takes effect July 1, 2026, as Grad PLUS loans will no longer be available to new borrowers.
For years, Grad PLUS allowed students to borrow up to the full cost of attendance, with no underwriting to assess whether they could realistically repay. The result: program costs rose, student debt climbed, and taxpayers absorbed the losses.
The numbers explain why. The price of master's programs has climbed 158% since 1993, and Americans now owe $1.83 trillion in student loans, more than 90 percent of it federal loans. Federal Grad PLUS lending alone is expected to total roughly $15 billion in the 2026–2027 school year because existing borrowers may continue borrowing for up to three more academic years. But by the 2028–2029 school year, new Grad PLUS originations will be a fraction of today’s volume.
CBA has been focused on what comes next. In recent months, CBA has convened a symposium on the future of graduate student lending, published a white paperexamining the transition away from Grad PLUS, and elevated the issue in a recent U.S. News & World Report op-ed from CBA President and CEO Lindsey Johnson.
The core point is simple: Graduate education should live up to its promise as a launchpad, not a liability.
CBA’s analysis shows private lenders may be able to support some borrowers who would otherwise have relied on Grad PLUS. But a responsible transition will require more than private market capacity alone. Policymakers, schools, and states also need better program-level data, clearer underwriting guidance, and a stronger focus on affordability.
To fully protect students, CBA recommends three steps:
- Provide greater data transparency on schools and programs, including through the proposed Student Tuition and Transparency System (STATS) and Earnings Accountability framework, to allow researchers, policymakers, students, parents, and other market participants to better assess program value and identify areas for improvement.
- Provide clear fair-lending guidance on the use of alternative data in underwriting to expand access to education financing for those who can benefit from continuing their higher education journeys.
- Encourage states and schools to continue to step up and address affordability directly.
As the July 1, 2026 Grad PLUS deadline approaches, CBA is engaging policymakers and legislators on ways to protect students, support responsible private student lending, and address the underlying affordability challenges in graduate education. A successful transition will require greater transparency, stronger accountability, and better data on graduate program costs, earnings, and repayment outcomes.
Read the full op-ed here. The op-ed follows a recent white paper that CBA published on the topic.
What Else We're Watching
Trump Administration Aims to Reorient CFPB Back to Original Mission
What Happened: Last year, the Trump Administration had aimed to close the CFPB. Now, it has pivoted to returning the Bureau to a more active regulator.
Why It Matters: The CFPB was previously criticized by Republicans and the financial services industry for being overly politicized under Democratic Administrations.
- The Trump Administration’s reorientation of the CFPB aims to correct overreaches targeting businesses deemed political enemies and imposing additional costs on Americans.
What They’re Saying: Current CFPB leadership says the goal is to operate the agency within statute:
“We are fixing that, bringing the agency back to operating within statute and away from breaking the law, and making cases right to help small businesses and Americans who were victims of this thuggery.”
Yes, and: Just this week, President Trump nominated Brian Johnson, former CFPB Deputy Director during his first Administration, to be CFPB Director once Acting Director Russ Vought’s tenure comes to an end in August.
Our Thought Bubble: We have long called for a more durable, credible CFPB that functions within its statute.
- As we told The Washington Post, we are encouraged by the Bureau’s new direction to focus on “identifiable victims, measurable harm, and clear legal standards” over novel legal theories.
Dive Deeper: To read more, click HERE. To learn more about CFPB reform HERE.
SBA's Kelly Loeffler Predicts AI Will Fuel Main Street Growth
What Happened: This week, Small Business Administration (SBA) Administrator Kelly Loeffler predicted that AI will fuel job creation for Main Streets across America.
Why It Matters: Over the past few years, AI has impacted markets in nuanced ways – including small businesses, which currently employ a large portion of the American workforce and are a major driver of economic growth.
Between the Lines: According to Bank of America’s May analysis of small businesses, optimism remains below its 52-year average – staying consistent with falling profitability growth and concerns about the broader economic outlook.
What They’re Saying: Speaking at Axios AM Live, Administrator Loeffler backed the SBA’s deregulation and offshoring agenda and access to the capital for small businesses:
"We're really reorienting the agency to be technology- and customer-driven as opposed to bureaucracy-driven.”
Yes, but: The National Small Business Association warned the cuts, if implemented, "could be very dramatic, resulting in higher costs for lending, fewer technical resources and greater difficulty for small businesses seeking assistance from the agency."
Dive Deeper: To read more, click HERE. To watch CBA President and CEO Lindsey Johnson's conversation with SBA Deputy Administrator Bill Briggs to discuss SBA’s Role in supporting small businesses, click HERE.
Lawmakers Continue to Remain Divided Regarding Crypto Market Structure Legislation
What Happened: House Financial Services Committee Chair French Hill (R-Ark.) struck an optimistic note on Tuesday about the crypto market structure bill being passed by the Senate – but later that day, Senate Republicans reportedly floated a “weaker” set of crypto ethics guardrails during a bipartisan meeting.
Why It Matters: There are several outstanding issues that need to be addressed in the Senate version of the Clarity Act, related to stablecoin yield and rewards, ethics rules related to public officials’ crypto activity, and law enforcement concerns related to DeFi.
- The ethics language noted above could prove to be another setback for crypto talks, as Senate Democrats have previously emphasized the importance of strong ethics guardrails in order to pass the legislation.
Between the Lines: In May, Senate Republicans and the White House offered Democrats an ethics enforcement mechanism to allow state attorneys general to sue the Justice Department for failing to enforce federal crypto ethics requirements.
- This week, GOP negotiators discussed removing the state enforcement provision, citing concerns from other Republicans worried about being exposed to prosecution by state AGs.
What They’re Saying: Speaking at the U.S. Chamber of Commerce on Tuesday, Chairman Hill emphasized the importance of the crypto market structure bill:
"There's no question in my mind that we need a market structure bill enacted and signed into law by President Trump, because there are some who are on the fringes of decentralized finance or blockchain technology who think, 'Well, we can just craft new blockchain-oriented financial services system through exemptive relief, through existing federal statute and regulatory agencies," Hill said, "I find that a fiction — I don't believe that to be the case. I think you need bright-line statutory language to do that."
Chairman Hill also noted that despite not including banks’ preferred language on stablecoin yield, the bill is already in “the zone of acceptability” and that both sides will simply “have to come to terms with trying to get the best that they can.”
Yes, but: Degrading negotiations in the Senate have left a bad taste in lawmakers’ mouths.
- Sen. Ruben Gallego (D-Ariz.) suggested he was unhappy with the state of talks, saying he doesn’t know if the Trump Administration is acting in good faith or bad faith regarding ethics guidelines.
- Sen. Bernie Moreno (R-Ohio) defended Senate Republicans’ choice to remove ethics language giving state attorneys general the ability to sue, “I’m pointing out to these guys, like the shoe will be on the other foot someday. Think about that scenario when there’s a Democrat president or Democrat majority. You don’t think they’d go after Adam Schiff every day of the week?”
Dive Deeper: To read more, click HERE and HERE.
The Week Ahead
📅 June 17, 2026, at 12 p.m.
The Atlantic Council: Stablecoins, Tokenization, and Cross-Border Payments
Washington, D.C., and Virtual
📅 June 17, 2026, at 2 p.m.
October Research: The Title Report Q2 Economic Outlook
Virtual
📅 June 17, 2026, at 2:30 p.m.
Federal Reserve Board: Board Chairman Kevin Warsh Press Conference
Washington, D.C., and Virtual
📅 June 17, 2026, at 2:30 p.m.
Senate Small Business and Entrepreneurship Committee: Hearing on 250 Years of Main Street: Retail to Research
Washington, D.C., and Virtual
What We’re Reading
- American Banker: 'The data has to be perfect': BofA CEO Moynihan on AI
- Axios: The business of AI's 4 harsh realities
- BankingDive: What SoFi learned testing its AI adviser Coach
- Bloomberg: The Cost of AI Is Showing Up in Inflation
- CNBC: JPMorganChase plans to deploy more powerful AI agents this year
CBA Mentions
- White House nominates new CFPB director, POLITICO, June 10, 2026
- Trump nominates CFPB’s former No. 2 as director, Banking Dive, June 10, 2026
- Illinois Delays Credit Card Fee Ban as Banks Score Win, CardRates, June 2, 2026
- The End of the Grad School Lifeline?, Inside Higher Ed, May 26, 2026
- It May Be Tough for Banks to Avoid Trump's Immigration Crackdown, Capitol Account, May 21, 2026
