Sallie Mae to Benefit From Proposed Federal Student Loan Caps

Core Insights - The Trump administration's proposed tax bill, "One Big, Beautiful Bill," aims to benefit companies like Sallie Mae (SLM) in the private student loan sector [1][9] - The bill introduces significant changes to federal student loan policies, including tighter borrowing limits for graduate and professional students, as well as parents [2][3] Summary by Category Proposed Changes to Student Loan Policy - Graduate student borrowing is proposed to be capped at $20,500 per year, with a total limit of $100,000 [3] - For professional programs, the borrowing cap would be $50,000 per year, up to a maximum of $200,000 [3] - Parents borrowing on behalf of students will face a new limit of $20,000 per student per year, with a total limit of $65,000 [4] Impact on Sallie Mae (SLM) - The proposed borrowing limits may lead students to seek private loans to cover educational costs, increasing demand for Sallie Mae's services [5][6] - Changes to federal repayment programs could drive borrowers to refinance their federal loans with private lenders like SLM, enhancing the company's growth potential [7][9] - Sallie Mae is focusing on strengthening its capital foundation and expanding its product offerings in private student lending [8] Market Performance - Over the past three months, shares of SLM have increased by 33.3%, although this is below the industry's growth of 36.1% [12]