Can the Trump administration make college cheaper?
7/1/202629 min
Will limiting how much students can borrow force schools to lower their prices?
The Department of Education thinks so. It has a new plan to bring down tuition costs. Starting today, July 1st, it’s going to cap how much it’s willing to loan to graduate students.
You read that right. To reduce the burden of school…the plan is to give students less money to pay for school.
This plan is, in part, based on an idea that’s been floating around higher education circles for decades: The Bennett Hypothesis, which claims there’s a direct relationship between student borrowing and tuition prices. And therefore, if the Department of Education — the biggest student loan provider in the country — limits how much students can take out, then schools will have no choice but to charge students less.
This hypothesis was floated roughly 40 years ago...without evidence. But now, as the Trump administration rolls out their Bennettian plan, we have decades of data to see how true this hypothesis is.
Today on the show: NPR Education Correspondent Cory Turner explains this theory, and what the new plan influenced by it will mean for borrowers this fall.
Other notes:
- Bill Bennett: “Our Greedy Colleges”
- Cory Turner: "July 1 brings big student loan changes. Here's what you need to know"
- The Indicator: "What you should know about your student loans"
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This episode was hosted by Cory Turner and Kenny Malone. It was produced by Willa Rubin and edited by Marianne McCune. It was fact-checked by Charlotte Isidore and engineered by Robert Rodriguez. Alex Goldmark is our executive producer.
Music: NPR Source Audio - “Morning Chorus,” “Belle Mar,” and “The Sky Was Orange.”
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Transcript preview
First 90 secondsSpeaker 10:00
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Cory Turner· Host0:15
This is Planet Money from NPR.
Kenny Malone· Host0:18
The Trump administration is taking a new approach to a very sticky problem in the United States, that of student loan debt, all nearly $1.7 trillion of it. The Department of Education has a plan to bring down tuition costs beginning today, July 1st. Uh, what is that plan? Well, Education Secretary Linda McMahon recently described it to lawmakers at a committee hearing on Capitol Hill.
Linda McMahon· Soundbite0:47
We wanna bring down the cost of education.
Kenny Malone· Host0:50
Yeah. Uh, so far, so good following that. Then she describes this big change to the federal program that loans students money for school.
Linda McMahon· Soundbite0:58
We've put in caps on programs for graduate students and undergraduate students to make sure that we can help reduce the cost and the burden of college.
Kenny Malone· Host1:09
Uh, yeah, actually, hold there for a second because that, that is the confusing bit for me. I believe she said to, quote, "Help reduce the burden of college." The plan is to give less money to student borrowers.
Cory Turner· Host1:24
And that's where I [laughs] I was really intrigued by their logic.