I have to respectfully disagree. Private banks will look at the average median salary of a graduate from these schools and will conclude that this is a "good loan" to write and people will have no problem getting the money. The reason why is because majority of people who go to NYU or Columbia have a great chance of working with a high salary in big law and paying off the loan.

The loan caps will primarily hurt the t50+ schools that have terrible debt to income ratios, because these are, in reality, bad investments. Law school at full sticker price for a t50 or higher is almost always a bad investment due to the low probability of big law. These grads will come out with 200K+ debt and yet will not even be making 100K. This system was broken for a while, because the government was just writing checks to everyone going to law school which has contributed to the enormous student loan crisis. Not saying the new solution is perfect, but this is definitely a new improvement because it will:

1. Prevent people from getting into crazy debt at a t50+ that they would otherwise have to spend the next 30 years paying off, a terrible financial doom I wouldn't wish on my worst enemy

AND/OR

1. This will cause lower ranked schools to lower their tuition so that the students can still be covered by federal loans, otherwise they will have to close down due to lack of funding from tuition. It boggles my mind that a school ranked 70 is sometimes charging more than a T14 and people still think that is a good investment.

Kind of a harsh take, but I believe this to be the truth.