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Millions of student-loan borrowers risk being driven into a ‘shadow’ market of costly private lenders, a new report says

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Risky lending products could expand as federal student-loan repayment changes begin to roll out, a new report says.

On Tuesday, advocacy group Protect Borrowers and left-leaning think-tank The Century Foundation released a report on how the private student-loan industry will shift once President Donald Trump’s federal repayment overhaul is implemented.

The report found that 40% of Americans would be denied private student loans from traditional, prime lenders due to low credit. It could drive them to consider the “shadow” student debt market, which is made up of subprime lenders, including personal loans, debt owed directly to schools, and “Buy Now, Pay Later” products, all of which can come with high interest rates and aggressive debt collection.

Those products could get a boost from Trump’s “big beautiful” spending legislation, which included new caps on borrowing for advanced degrees. Previously, students could borrow up to the full cost of attendance through federal student loans. Under the new caps, programs with higher tuition could push borrowers to seek private financing or forgo those programs altogether.

Jennifer Zhang, Protect Borrowers’ policy, research, and data analyst, told Business Insider that traditional private lending limits will “hurt the people who arguably would stand to gain the most from the federal student loan program” because students from low-income backgrounds and students of color often have limited access to credit.

“The pivot toward private lending is going to deprive students of access to college and to make their choice,” Zhang said. “Either you can give up on the dream of higher education, or try to look for lenders that are increasingly predatory and offer highly predatory and expensive loans to people who are the most desperate.”

During negotiations on Trump’s spending legislation, the Department of Education said that borrowing caps for advanced degrees would prevent borrowers from taking on unaffordable debt, and could push colleges to lower tuition. Major private lenders have said they’re prepared for an influx of federal borrowers; Jonathan Witter, CEO of Sallie Mae, said during a January earnings call that he’s “excited about the opportunity created by the recent federal student lending reforms.”

Some of those lenders also told Democratic lawmakers in February that, in anticipation of the influx, they’re committed to offering borrower protections. Sallie Mae said that its customers face “the highest periods of repayment stress” in their first 12-24 months of repayment, and it offers grace periods for those borrowers. SoFi, another major private lender, said it has “many options,” like grace periods and deferments, to help its borrowers avoid delinquency.

In a time when oversight over private student loans is diminished — including staff cuts at the Consumer Financial Protection Bureau, which brought enforcement actions against the industry — Zhang said the repayment changes are even more “dangerous.”

“The transition toward increased private lending is going to happen in a context where lenders know that the CFPB and the Department of Education are really not doing their jobs and looking for the lenders who are breaking the law,” Zhang said.

A shifting student-loan repayment landscape

With oversight lacking, the report had recommendations to protect borrowers from risky lending products. One is to require private student-loan companies to register with their state financial regulator, which would allow the state access to information on the lender’s performance and portfolio. Only eight states have passed legislation requiring private lenders to register with states, the report said.

The report also called for more federal and state funding toward higher education to prevent borrowers from relying on debt-based systems.

For now, the private student-loan industry could see increased demand. The Department of Education will begin implementing the repayment changes on July 1, including new income-driven repayment plans, and borrowers previously told Business Insider that they’re bracing for higher monthly payments.

At the same time, the department will transition more than 7 million borrowers off of the SAVE student-loan repayment plan this summer, after a recent settlement to end the program early. SAVE would have been phased out in 2028 — now, millions of federal borrowers will be navigating a new repayment system, and some might turn to the private market.

A group of Democratic lawmakers led by Sen. Elizabeth Warren released an analysis in January calling for increased oversight over the industry due to the looming repayment changes.

They wrote that private lenders preparing for an influx of federal borrowers “underscore an urgent need for oversight of the private lending market as these companies prepare to cash in on the Administration’s agenda.”




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What smart people in economics and business are saying about a viral report warning of an AI-driven recession and stock crash

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  • A viral research report warned of a stock market crash and double-digit unemployment by 2028.
  • The note sent software stocks sliding and rattled investors.
  • Critics said markets may be overreacting to a worst-case scenario thought experiment.

A research note warning that the AI boom could trigger a recession and a stock market crash spooked investors and sent software stocks sliding on Monday.

Citrini Research outlined a hypothetical 2028 scenario in which rapid AI adoption leads to mass white-collar layoffs and a collapse in consumer spending.

The report, which was published Sunday, went viral and amplified debate over whether AI is a productivity boom or a destabilizing shock.

Here’s what prominent economists and business leaders are saying about the note:

Claudia Sahm

Claudia Sahm, the chief economist of New Century Advisors and creator of the Sahm Rule recession indicator, raised concerns about the framing of the scenario.

“One concern with the Citrini scenario (and mirrored in the current moment) is the focus on destructive (left) rather than constructive (right),” Sahm wrote on X on Monday. “Maybe the latter takes longer, but it matters for the new equilibrium, too.”

In a follow-up post, she said that a labor market shock of the magnitude Citrini describes would likely trigger a forceful policy response.

“The labor market crisis they describe would generate a forceful fiscal/monetary response. They downplay that,” Sahm wrote. “The more likely scenario of gradual, limited job losses will be the hard one to get policymakers to focus and act.”

Michael Burry

Michael Burry.

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Michael Burry, the investor famous for predicting the 2008 housing crash and profiled in “The Big Short,” amplified the report to his millions of followers.

“And you think I’m bearish,” Burry wrote on X, linking directly to Citrini’s research.

His post included a chart from the Citrini report, titled “The AI Feedback Loop: A Non-Cyclical Disruption,” contrasting traditional recessions — which, it said, self-correct — with what Citrini describes as an AI-driven cycle with “no natural brake.”

Brendan Duke

Brendan Duke, a senior director for federal budget policy at the Center on Budget and Policy Priorities and a former senior policy advisor at the Biden-Harris White House National Economic Council, said many critics may be misreading Citrini’s premise.

“A lot of people have a hard time with the concept of a thought experiment,” he wrote on X.

However, Duke added that one underappreciated risk in the scenario is the financial market impact if “prime white collar borrowers who nobody ever thought would default… defaulting” becomes a reality — referring to the report’s suggestion that white-collar layoffs could cascade into prime mortgage and private credit stress.

Jeff Dorman

Jeff Dorman, chief investment officer at Arca, framed the response to the report as a lesson in investor psychology.

“The biggest takeaway from the virality of this Citrini doom porn is that fear sells,” Dorman wrote on X, referring to Monday’s stock market sell-off.

He said that markets and media often reward dramatic crash predictions, even if they rarely materialize.

“There are thousands of successful macro newsletters that you pay money to subscribe to, and all of them tell you to buy gold, build a bunker, and short stocks,” he wrote, adding that high-profile recession forecasters frequently get attention despite repeated false alarms.

Deepak Shenoy

Deepak Shenoy, founder of Capitalmind, compared the AI recession warning to past resource-scarcity warnings.

“This is the viral post that currently spooks everyone,” Shenoy wrote in an X post.

He pointed to 2008-era warnings that oil reserves were running out — fears that did not ultimately dismantle the energy industry.

“Doomsday porn is addictive,” Shenoy wrote. “AI based end of everything is the WWF of the world now, fun to watch but is mostly fake.”

Michael Bloch

Michael Bloch, a partner at VC firm Quiet Capital, published a rebuttal titled “The 2028 Global Intelligence Boom.”

He said that even if AI keeps improving rapidly, it doesn’t have to end in a crash — it could make the economy richer.

“What if our AI bullishness continues to be right… and what if that’s actually bullish?” he wrote on Substack this weekend.

Bloch said investors are confusing pain in parts of tech — like SaaS and middleman-style businesses — with a broader economic collapse, and that cheaper services could leave households and startups with more money to spend.




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Katherine Li, West Coast breaking news reporter at the Business Insider.

The author of a viral AI report warns that blue-collar jobs won’t be safe from an AI-driven recession

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The coauthor of an AI research paper is speaking out after his work triggered a global stock sell-off.

Citrini, a firm focused on thematic equity investing, alongside Alap Shah, CEO of Littlebird.ai, theorized a future where, instead of transforming the economy in a positive way, the AI boom erases white-collar jobs and severely reduces the spending power of those workers, and eventually stunts economic growth.

On Monday, Shah told “TBPN” podcast hosts John Coogan and Jordi Hays that despite how well it seems to be going for blue-collar jobs at the moment in terms of growth and the lack of mass layoffs, these jobs won’t be safe if white collar jobs go away because ultimately, there is only “one labor market.”

“Let’s say in our scenario, we talk about 5% of folks might get fired in a couple of years,” said Shah. “Those 5%, if there aren’t white collar jobs for them to relocate into, then they’re going to have to move into the gig economy and the blue collar labor force.”

“And so that puts pressure on the entire labor market, not just the white collar one,” Shah added.

Shah and Citrini published a report on Sunday, written from a futuristic point of view set in 2028, that predicts a negative domino scenario triggered by the AI boom. The research theorizes that AI will kick off a mass white-collar layoff too quickly, which will then deal a blow to the metro housing and mortgage market, and eventually lead to a global stock sell-off and a widespread recession in all sectors. In this scenario, the paper said, AI growth could also lose momentum due to a lack of funding.

“The system turned out to be one long daisy chain of correlated bets on white-collar productivity growth,” the paper theorizes. “The November 2027 crash only served to accelerate all of the negative feedback loops already in place.”

Shah elaborated on these concerns on “TBPN.” When asked what he thinks of the current growth in the health and education sectors, Shah said most of it could be spurred by government spending, which would go away if personal income declines.

“Those sectors continue to grow because government spending grows,” said Shah. “But again, gets very circular if government spending is coming primarily from taxes and primarily payroll taxes because the average worker pays a lot more in taxes per dollar than the average corporate does.”




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Jobs report updates: Dow, S&P futures hold steady ahead of employment data release

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It’s jobs Wednesday!

Yes, you read that right. The monthly jobs report, a Friday tradition, is coming out this morning, five days later than originally scheduled due to the partial government shutdown.

Economists expect the US added 65,000 jobs in January and unemployment remained at 4.4%.

Investors are looking at the January jobs report to see if the job market has continued stabilizing following a difficult 2025. The US added only 584,000 jobs last year, the lowest employment growth since 2003, excluding recessions.

The coming report will include revisions to past job growth, so last year’s employment level could change.

The report is expected to drop at 8:30 a.m. ET. Stay with us as we preview the data and then give you an inside look at everything you need to know about the report when it drops.




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A new report found nearly 4 in 10 cancers are linked to preventable causes. Here are the best ways to lower your risk.

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A new report from the World Health Organization found that nearly 7 million cases of cancer worldwide were preventable.

Analyzing 18.7 million new cancer cases in 2022 (the most recent data available to them), researchers found that nearly 4 out of 10 cases were linked to 30 modifiable risk factors, including smoking tobacco, infections like HPV and hepatitis B, and consuming alcohol. Stomach, lung, and cervical cancer accounted for almost half of all preventable cancers in the report.

The findings are a comprehensive assessment of cancer cases globally, which vary greatly by region, so while promising, they come with limitations.

The news comes less than two weeks after it was revealed that colon cancer is now the leading cause of cancer death in people under 50.

Cancer can be caused by a variety of factors, including family history, genetic mutations, and environmental pollutants — all things out of our control — but some risk can be mitigated with lifestyle modifications.

Follow a diverse, Mediterranean-ish diet


Salad

Eating whole, fiber-rich foods can lower cancer risk.

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Research shows that diets involving lots of ultra-processed foods (UPFs) are linked to higher cancer risk. They can increase inflammation and disrupt the gut microbiome, increasing the risk of colon and ovarian cancer.

A diet rich in whole foods is the best way to go. Dr. Daniel Landau, an oncologist specializing in genitourinary cancers, previously told Business Insider that he mostly follows the Mediterranean diet, focusing on lean protein, fruits, vegetables, whole grains, nuts, and legumes while limiting red meat (which might be carcinogenic), dairy, alcohol, sugar, and UPFs.

Gut-healthy foods are also important. Dr. Susan Bullman, an associate professor at MD Anderson Cancer Center who specializes in gut health and cancer research, previously told Business Insider that she eats fiber-rich foods like pears and probiotics like kefir to feed beneficial gut microbes. Eating a wide variety of plants, such as swapping out vegetable sides or sprinkling seeds on top of salads, can also improve gut health.

Work out at least 30 minutes a day


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Even a quick walk counts as exercise, which reduces cancer risk.

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Exercise has long been associated with a reduced risk of cancer. One 2025 trial found that a strict workout regimen for preventing colon cancer resurgence than expensive treatments like chemotherapy. While scientists are still exploring the reasons why exercise is so effective at cancer prevention, they have their theories. Dr. Paul Oberstein, a medical oncologist at NYU Langone, previously told Business Insider that exercise is probably reducing inflammation, which may help slow tumor growth.

Dr. Sue Hwang, an oncologist who was diagnosed with breast cancer, said you should aim for 30 minutes of exercise a day, whether it’s strength training or cardio.

If you can’t make it to a gym every day, she said, even taking a walk or playing with your kids in a playground helps. Even vigorous daily movements, like climbing up stairs or carrying heavy groceries, can cut down cancer risk. Still, the best thing you can do is pencil in real workouts.

Be proactive about screenings


Mammogram

Getting screened can catch cancer earlier.

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Being aware of early cancer symptoms, like blood in your stool for colon cancer, can help you seek screenings earlier than the recommended starting age.

It’s also important to be aware of your family history, any genetic mutations like Lynch syndrome that increase risks of several cancers, or other factors like PCOS for endometrial cancer.

Dr. Thaïs Aliabadi, an OB-GYN who helped Olivia Munn get diagnosed with stage 1 breast cancer, said collecting data on your body, such as previous biopsies or breast density, can help you better assess your risk.




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This one activity remained the largest driver of GDP growth in 2025 — not AI, according to a new report

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Worried about the AI bubble? A new report suggests AI was not the main leg propping up the economy in 2025.

Macro Research Board Partners, an economic research platform, published a report in January that contradicted the popular belief that AI is the main driver of GDP and that the “narrowly concentrated” and “extremely vulnerable” growth would tank the entire economy once it falters.

“In short, without an AI boom, there would have certainly been less GDP growth last year, but there would also be fewer imports, so that overall real growth would still have been decent,” wrote economic strategist Prajakta Bhide, who authored the report.

Bhide told Business Insider that personal consumption, meaning the spending of everyday people, was still the main pillar of GDP growth in 2025, and that despite the amount of investment in AI infrastructure, a lot of high-tech equipment is imported, and imports do not contribute to GDP.

The main categories that count toward GDP are personal consumption, private domestic investment, government spending, and net exports.

“Consumers continue to be the backbone of the economy,” Bhide told Business Insider. “Aggregate income growth is lower than it used to be, and so is job growth, which affected consumer sentiments. But there is a divide between what consumers say they feel and what they say that they’re going to do versus what they actually go and do.”

AI growth was an important secondary driver of GDP growth, the report found, but that is mostly from software investment, while the contribution of data centers is “negligible.”

“Although a negative shock to the optimism around AI implies a risk to GDP growth,” Bhide wrote in the report, “the more realistic (and smaller) estimate of AI’s growth impact after adjusting for imports dispels the popular notion that the US economy would falter without it.”

Beyond the GDP, concerns about the AI bubble are also tied to the stock market and people’s retirement funds. America’s eight most valuable public companies, including Nvidia, Alphabet, and Apple, are all betting heavily on AI and are worth $22 trillion altogether.

Business Insider has previously reported that historically, a pullback in consumer spending has rarely been the trigger for an economic downturn. Instead, spending typically weakens only after job losses mount and when a recession is already well underway.




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Jobs report updates: US added fewer jobs in December than expected, but unemployment dropped

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It’s jobs day in America.

The US added 50,000 jobs in December, and the unemployment rate dropped to 4.4%, according to the Bureau of Labor Statistics’ monthly report on the employment situation.

Economists expected to see 70,000 jobs added in the final month of 2025, and an unemployment rate of 4.5%.

The report wraps up a year of a job market marked by a “Great Freeze” in which companies haven’t been hiring very much, employees haven’t been switching jobs a ton, but large-scale layoffs that would mark a deeper downturn haven’t materialized yet either.

Check back here for updates leading up to and following the biggest job market data release of the month.




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4 takeaways from the final jobs report of the year

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This week brought a vanishingly rare jobs report on Tuesday after the longest government shutdown in history threw a wrench in federal data collection, and it was a mixed bag.

The new data emphasized trends we’ve been seeing this year, including unemployment inching up and a tougher market for many job seekers.

The Bureau of Labor Statistics delayed the report from December 5 to extend data collection and processing after its activities were affected by the government shutdown that lasted from October to about mid-November.

The new data allowed economists, job seekers, reporters, and more to understand how job growth looked in both October and November; the BLS didn’t produce an October jobs report last month. While the report was missing items like the October unemployment rate, it gives us a fresh look at the labor market.

Here are four takeaways from the latest jobs report.

The job market is still frozen

Both Nicole Bachaud, a labor Economist at ZipRecruiter, and Laura Ullrich, the director of economic research in North America at the Indeed Hiring Lab, described the job market as still stagnant.

The US economy added 64,000 jobs in November, surpassing the 50,000 expected. That comes after a big net loss in October, largely because federal workers who took the deferred resignation offered as part of the DOGE job cuts earlier this year finally appeared in the data after the deferment ended.

Data published by the BLS last week showed job openings have been trending upward as of October, although they’re still far below what job seekers were accustomed to a few years ago. Workers’ confidence has also been low, as October’s quit rate was the lowest since 2020.

“Job growth has been very slow over the course of 2025, and it doesn’t seem like we’ve turned around quite yet to translate the pent-up demand for hiring and the recent increase in job openings into actual hires,” Bachaud said, adding that uncertainty over tariffs, inflation, and geopolitical issues has added to companies holding back on hiring plans.

“That’s the big question mark — when is that uncertainty going to finally ease up?” she said.

Healthcare’s job growth masks weakness in many other sectors

The better-than-expected growth in November was largely helped by job growth in healthcare, so Ullrich said this “doesn’t show a whole lot of strength in the macro labor market.”

Healthcare and social assistance sectors together had a net gain of 64,000 over the month. Most industries had a decline or a small rise in employment. Manufacturing, for instance, has continued its ongoing net loss.

Healthcare has been a bright spot throughout the year, and Bachaud said there will still be demand for workers as the population ages. However, it could be challenging for job seekers to pivot into these positions. Ullrich said many jobs in the sector typically require certain training and education.

“Construction is the other industry that we saw really strong growth in, as there is demand for continued skilled trades,” Bachaud said. Construction added 28,000 jobs, with the largest growth from specialty trade contractors.

Employers still have the upper hand

Wage growth has gradually cooled and reached the lowest point so far this year in November. Average hourly earnings rose 3.5% from a year ago.

The generally softer job market has made it harder for workers to negotiate higher wages. Ullrich said physicians have better wage-setting power than roles that aren’t seeing a lot of openings and where talent is waiting on the sidelines for a role.

She said employers can probably offer lower raises to current talent, too, since more people are staying put.

“If you know people aren’t quitting, you might not have to offer them the same bump in pay that you would if the quits rate was higher,” she said. “That being said, there’s still very tight competition for certain roles.”

Unemployment is the highest since 2021

The October 2025 unemployment rate won’t ever be released because that data, typically gathered from a survey of around 60,000 households a month, couldn’t be collected during or after the government shutdown. However, unemployment had been trending upward before that, and November was the same story.

November’s unemployment rate was the highest since September 2021 and slightly higher than expected. Still, the Bureau of Labor Statistics warned of data issues with unemployment and related figures over the next few months due to the missing October household survey, so economists and others will have to see how the rate continues to pan out.

Despite the data challenges, Bachaud said the higher unemployment rate and stickier long-term unemployment, where people have been out of a job for at least 27 weeks and actively searching, indicate that it has become harder to land a job.




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Women at the top are exhausted and burned out, according to a McKinsey and Lean In report

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Women are hitting the top of the corporate ladder only to find something waiting for them: exhaustion.

According to a report published Tuesday by McKinsey and LeanIn.org, a nonprofit founded by Sheryl Sandberg, burnout among senior-level women is the highest it has been in the past five years.

Around 60% of these women said they have frequently felt burned out at work in the past few months, compared with 50% of senior-level men, per numbers from the “Women in the Workplace” 2025 study.

Women who are newer to leadership roles are feeling the strain more acutely. Among senior-level women who have been at their companies for five years or less, 70% reported frequent burnout, and 81% said they are concerned about their job security.

“These high levels of concern align with research that shows women often face extra scrutiny when they’re new to organizations and have to work harder to prove themselves,” the report said, adding that Black women in leadership face exceptionally high burnout and job insecurity. “In contrast, when women and men in leadership have longer tenures, their levels of burnout and job security are quite similar.”

The report, an annual study of women in corporate America, surveyed 9,500 employees across 124 companies between July and August. The study also includes interviews with 62 HR executives and company-reported data from 124 organizations that together employ about 3 million people.

LeanIn.org launched a study with McKinsey in 2015 to track how women progress through the corporate pipeline and where companies fall short. The group is named after Sandberg’s 2013 book “Lean In,” which sparked a national debate about women’s ambition, leadership, and workplace equality.

This year’s findings paint a bleak picture for women at the top. Senior-level women who are hesitant to advance their careers say they see a steeper path forward compared to their male counterparts. Eleven percent of senior women who don’t want to advance say they don’t see a realistic route to promotion, compared with 3% of senior men. And 21% say more senior-level people look burned out or unhappy, nearly double the share of men who say the same.

It’s not because women are less committed — the report found that women and men are equally locked in. What differs is the desire to keep climbing, per the report.

The data shows a clear ambition gap: 80% of women want to be promoted to the next level, compared with 86% of men. That gap is widest at the beginning and the top of the pipeline — 69% vs. 80% at the entry level, and 84% vs. 92% among senior leaders.

This is the first time in the report’s 11-year history that women have shown lower interest in promotion than men, it said.

This gap in ambition to advance falls away “when women receive the same career support that men do,” the report added. In other words, companies are responsible for creating the burnout problem for women.

“This is only happening in the companies that aren’t doing the right thing when women get the full support and the same stretch opportunities. They’re not leaning out at all,” Sandberg said in a Tuesday interview with Bloomberg Television.

“What’s happening is that women face more barriers at every level of the career,” she added.

More companies are cutting back on DEI and support for women

Even as companies say they are committed to diversity and inclusion, at least one in six have reduced the teams or resources behind those efforts, the report said.

About 13% of employers have pulled back or eliminated women-focused career-development programs, and another 13% have cut formal sponsorship programs, which play a key role in helping employees advance, it added.

“Women overall are less likely to have sponsors — and this really matters. Employees with sponsors are promoted at nearly twice the rate of those without,” the report said.

The report also found that companies are rolling back remote and flexible work options, which can hinder women’s ability to stay and advance in their careers. One in four has scaled back remote or hybrid work arrangements, and 13% have reduced flexible working hours over the past year.

At the same time, the report said that women who work remotely most of the time are “less likely to have a sponsor and far less likely to have been promoted in the last two years than women who work mostly on-site.” Meanwhile, men receive more similar levels of sponsorship and promotions regardless of their work arrangement.

At the entry level, a stage where advocacy and visibility are essential, women are also less likely than men to receive stretch assignments and other opportunities, the report added.

Last year, the “Women in the Workplace” study found that more women were advancing to senior leadership roles. By 2024, women held 29% of C-suite roles, up from 17% in 2015.

However, progress fades at the entry and management levels, per the report. “For every 100 men promoted to manager in 2018, 79 women were promoted. And this year, just 81 women were,” it added.




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