Investors are betting on even more student-loan gouging under Trump

Less of a hand in education.
Less of a hand in education.
Image: Reuters/Mike Segar
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President-elect Donald Trump—the sheer idea of which is still strange to think about—has remained relatively quiet thus far in a number of policy areas, education among them. Investors in that space, however, seem to think they know his plans.

Shares in Navient and SLM (a.k.a. Sallie Mae)—the biggest student loan servicer and the biggest non-government student loan originator in the US, respectively—surged roughly 20% on Wednesday afternoon, with both companies hitting 52-week highs. Investors seem to believe Trump, in conjunction with a Republican-dominated Congress, will reduce the federal government’s role in education lending, and loosen up rules for for-profit colleges while at it.

Bloomberg reports that things are looking good for for-profit college companies such as Career Education Corp and DeVry, despite the proprietary education sector’s frequent scandals and deteriorating reputation in recent years.

Student loan debt has become a massive issue in the US—for a sense of scale, in 2015 it surpassed the entire GDP of Australia—and the Obama administration has pushed for new loan forgiveness programs. But Americans at large remain split over how to best handle such a blooming pile of debt.

The jury’s still out on what Trump is planning, for any aspect of higher education, really. So far, the most he’s commented on the topic is in his 2016 book Great Again: How to Fix Our Crippled America, in which he called the US Education Department a “disaster” and said Americans need to either “cut its power and reach” or “eliminate it completely.”

Other industries that will benefit from Trump’s ascension, according to investors: pharmaceuticals, guns, steel, and coal.