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Can the Trump administration make college cheaper?

July 1, 2026

AI Summary

5 min read

On February 18, 1987, Ronald Reagan's education secretary, William Bennett, published an op-ed in the New York Times titled "Our Greedy Colleges." In it, he argued that increases in federal student aid had "enabled colleges and universities blithely to raise their tuitions, confident that" the money would keep flowing. That idea—that more federal loans cause higher tuition—became known as the Bennett hypothesis. Nearly four decades later, the Trump administration is betting on it. Starting July 1, the Department of Education is capping how much graduate students can borrow from the federal government to about $21,000 per year for most programs, dismantling the unlimited loan system that has been in place for the last 20 years. The logic is straightforward: if the government lends less, schools will have to charge less. But as NPR education reporter Cory Turner explains, the evidence for whether that actually works is surprisingly mixed.

The Bennett Hypothesis: A Decades-Old Idea Gets a New Test

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What you'll learn

  • 1 (00:20) **The Problem and the Plan** - The Trump administration is tackling $1.7 trillion in student loan debt with a new plan to cap federal graduate student loans at roughly $21,000 per year, hoping to force colleges to lower tuition.
  • 2 (03:00) **The Core Question** - The hosts introduce the central puzzle: does the "less money, lower tuition" theory actually work?
  • 3 (05:36) **The Real Target: Grad School** - The hosts clarify that the major change is for graduate students, not undergrads, and explain why grad school is the focus.
  • 4 (07:51) **The History of Loan Caps** - The new caps are the latest move in a decades-long policy back-and-forth, returning to a system that existed before 2006.
  • 5 (09:02) **The Bennett Hypothesis is Born** - The core theory behind the plan originated in a 1987 op-ed by Education Secretary William Bennett, who argued federal aid enables colleges to raise prices.
  • 6 (11:48) **Testing the Hypothesis: The Texas Study** - The 2006 Grad PLUS program, which allowed unlimited borrowing, created a natural experiment to test the Bennett hypothesis.
  • 7 (16:05) **Testing the Hypothesis: The National Study** - Researcher Robert Kelchin found no evidence of the Bennett hypothesis when looking at specific fields like business, law, and medicine across the country.

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Guests on this episode

Cory Turner

Show Notes

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.

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This episode was hosted by Cory Turner and Kenny Malone. It was p
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