Changes in Student Loans

A fundamental shift in federal student loans for Class of 2026 and 2027 will dramatically impact which colleges are affordable. Here's exactly what changed—with real numbers.

The Example: $94,000 Private College

School cost: $94,000/year (typical for selective private colleges like USC, Chapman, LMU, or private HBCUs)

Family income: $90,000+

Grants & scholarships: $42,000

Amount still owed: $52,000

OLD WAY (Before Class of 2026)

• Parent federal loan $46,500

• Student federal loan: $5,500

• Total: $52,000

• Who bears the burden? Parents take nearly all responsibility—for 10-15 years or more.

NEW WAY (Class of 2026 & 2027)

• Parent federal loan: $20,000 (MAXIMUM—cannot borrow $1 more)

• Student federal loan: $5,500

• Private alternative loan (student must borrow): $26,500

• Total: $52,000

• Who bears the burden? Students now take nearly all responsibility.

What This Really Means

Over 4 years at this school:

• Student accumulates $100,000+ in debt

• Monthly payment: $1,600 for 7+ years

• Starts immediately after graduation

For a communication degree graduate:

• Expected first job: $55,000-$60,000 (high end) or $47,000-$48,000 (typical

• After taxes with $1,700/month loan payment:

  • Cannot afford to leave home

  • Would need to work two jobs just to survive

Same graduate from a CSU:

• Minimal debt

• Can afford independent living with 1-1.5 jobs

• Strong return on investment

Why This Changes College Selection

Students must now understand return on investment. They're young, starting their lives, and will carry this debt for years.

Low-ROI combinations to avoid:

• Liberal arts degrees from expensive private schools

• Any non-STEM degree requiring $100K+ in student debt

• Jumping straight into a master's degree with undergraduate debt

Parents used to absorb this impact without expecting ROI. They sacrificed later in life for their children. But students have their whole lives ahead and we cannot let them ruin their financial future because they don't understand how dramatically loans have changed.

Affordable colleges matter more than ever. The shift from parent loans to student loans means young people will bear the financial consequences of expensive college choices for the next decade of their lives.

This isn't just about money—it's about whether your graduate can:

• Move out and live independently

• Save for the future

• Make career choices without desperate financial pressure

• Build the life they want

Choose wisely. The numbers have changed everything.

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