The question of whether college students should take out federal or private student loans to pay for their education may have just gotten harder to answer.
That’s due to a number of changes in President Donald Trump’s so-called “big beautiful bill” that will affect many current and future federal student loan borrowers.
The bill undoes several of the reforms President Joe Biden made during his time in office, such as protections for defrauded borrowers. It also eliminates repayment options and benefits like economic hardship deferrals that predate the Biden administration.
Historically, federal student loans have generally been a better deal for borrowers, Kate Wood, a lending expert at NerdWallet, tells CNBC Make It. The coming changes won’t necessarily make federal loans a “poor choice,” she says, but the decision may not be as obvious as it once was.
Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy, agrees. Turner has published several research papers on the role and impact of federal financing in higher education and previously served as an economic adviser within the Department of Education.
