Can the Trump administration make college cheaper?

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 https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleges.html”Cory Turner: "July 1 brings big student loan changes. Here's what you need to know https://www.npr.org/2026/06/10/nx-s1-5835633/student-loans-guide-education-changes-repayment-plan"The Indicator: "What you should know about your student loans https://www.npr.org/2026/06/29/nx-s1-5872779/what-you-should-know-about-your-student-loans" Support: Planet Money+ https://n.pr/3HlREPzRead: Our book: Planet Money: A Guide to the Economic Forces That Shape Your Life https://lnk.to/i3AukBdD Our weekly longform Planet Money newsletter https://n.pr/3zrFvUBOur weekly Indicator round-up newsletter https://www.npr.org/newsletter/indicatorFollow: Instagram https://n.pr/3FqLuwsTikTok https://n.pr/3sGZdrqYouTube https://lnk.to/iCVDaW3CFacebook https://n.pr/3h92GwSThis 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.” See pcm.adswizz.com https://pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. NPR Privacy Policy https://www.npr.org/about-npr/179878450/privacy-policy

• 0:00Speaker 00

  This message comes from iXL. iXL's Level Up Diagnostic gives immediate benchmark results along with personalized action plans that link directly to iXL's skill practice. More at ixl.com/NPR.

• 0:16Speaker 01

  This is Planet Money from NPR.

• 0:21Speaker 02

  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. What is that plan? Well, Education Secretary Lyndon McMahon recently described it to lawmakers at a committee hearing on Capitol Hill.

• 0:47Speaker 03

  We want to bring down the cost of education.

• 0:49Speaker 02

  Yeah, so far, so good, following that. Then she describes this big change to the federal program that loans students money for school.

• 0:58Speaker 03

  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.

• 1:09Speaker 02

  Yeah, actually, hold there for a second, because 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.

• 1:24Speaker 04

  And that's where I was really intrigued by their logic.

• 1:29Speaker 02

  This is Cory Turner, covers education for NPR. Every time I run into Corey at the NPR coffee machine, he will tell me something about some new thing happening in education. And then, months later, the thing has exploded into a front page story. And that is why I listened to Corey recently when he told me to go check out Secretary McMahon's tuition-fighting plan. So that plan, basically, is, starting July 1st, if you want to get a graduate degree in most fields, the Department of Education, the biggest lender for student loans, is saying that they're only going to give you about $21,000 a year. That is the cap. If your tuition costs more than that, well, sorry, the Ed Department is not lending extra to cover it.

• 2:14Speaker 04

  The administration's logic is based on this sort of old idea. And that is that if there's a lot of federal student aid floating around in the higher education marketplace... Colleges have no incentive to lower their prices. And so if they cap federal student loans specifically for graduate students, then the hope is colleges and universities all over the country will have no choice but to then lower their prices.

• 2:49Speaker 02

  I have many follow-up questions.

• 2:53Speaker 04

  Yeah, so it sounds logical. The question is, is it actually true?

• 3:01Speaker 02

  Hello and welcome to Planet Money. I'm Kenny Malone.

• 3:03Speaker 04

  And I'm Corey Turner.

• 3:04Speaker 02

  And Corey, I believe you have now called basically anyone who has had a hand in trying to study whether or not this proposal stands a chance to work.

• 3:11Speaker 04

  That's right.

• 3:12Speaker 02

  Today on the show, Corey tells us what he's found and tells us the roots of this less money, less tuition problems. Is that what they're calling it?

• 3:21Speaker 04

  Lower loans, lower prices? I don't know.

• 3:24Speaker 02

  It might need workshops. Whatever the name of this is, the roots of this particular solution.

• 3:35Speaker 05

  Stay tuned for the following announcements and messages from our sponsors. This message comes from Rula. World Mental Health Day takes place in October, making it a great time to take that next step in getting support if you need it. Rula makes accessing quality mental health care affordable with sessions costing an average of $15 with insurance. So turn off the talk track that's keeping you from progress and head to rula.com. That's R-U-L-A dot com to find a therapist the easy way. Support for this podcast and the following message come from E-Trade from Morgan Stanley. Simplify your finances and discover the convenience of investing and banking all in one place.

• 4:16Speaker 05

  Plus, get up to $1,500 when you open a brokerage account with a qualifying deposit today. Learn more at etrade.com/offer. Banking products and services are provided by Morgan Stanley Private Bank, National Association, Member FDIC. Terms and other fees apply. Investing involves risks. Morgan Stanley, Smith Barney, LLC, Member SIPC.

• 4:38Speaker 02

  So we're gonna bring college prices down. That's what we're about to do today?

• 4:42Speaker 04

  Yeah, I'm excited. College prices, look out, you're going down.

• 4:46Speaker 02

  Today, we have invited NPR's Corey Turner over to our Planet Money house because big things that may affect you, that may affect your kids, your higher edge dreams, they are happening.

• 4:57Speaker 04

  There's a consensus that there's a problem with the size of federal student loan debt in America. The question is, how do we fix the problem moving forward?

• 5:07Speaker 02

  Give less money out.

• 5:08Speaker 04

  Give less money out. That is their proposal. And so I-

• 5:12Speaker 02

  May I ask, before we address that, is the problem that the money is being given out, or that the money is needed, that college is so expensive?

• 5:22Speaker 04

  Ah, why would you ask such a Gordian knot of a question? Maybe.

• 5:28Speaker 02

  I see, okay. For the rest of the episode, we will try to untie that knot, to understand what problem the Trump Department of Education is trying to fix specifically, why they think less money is the right approach, and simply, will it all work? But first, something we must address.

• 5:47Speaker 04

  The administration's plan, the changes going into place today, I mean, they will affect some loans for undergrads through a program that lets parents borrow for their kids. But really, what we're talking about here, the huge change is not about undergrad. It's all about grad school.

• 6:06Speaker 02

  And like, what? Well, prepare to have your mind blown.

• 6:12Speaker 04

  So here's the weird thing. So the cost of undergraduate college is not rising.

• 6:19Speaker 02

  What?

• 6:19Speaker 04

  The net price of undergraduate four-year programs has been stagnant for roughly 10 years.

• 6:27Speaker 02

  Why, Corey, then? Whenever I run, like-

• 6:30Speaker 04

  I know.

• 6:30Speaker 02

  -calculations for how much I'm supposed to save for my very young children for college, it's like, oh, you might need millions of dollars. Why are, why are people telling me that?

• 6:40Speaker 04

  Well, so there is a chasmic difference.

• 6:45Speaker 04

  Between sticker price and net price.

• 6:48Speaker 02

  Got it, got it. Net price is what people actually pay.

• 6:51Speaker 04

  Exactly. Sticker price has been rising steadily for a long time.

• 6:57Speaker 02

  Okay, send all your emails to Corey, but college net cost has not risen nearly as much as you may think.

• 7:03Speaker 04

  Undergraduate college net cost, net, net, not sticker, net, has not budged much.

• 7:10Speaker 02

  Corey says schools advertise eye-popping tuition rates, but after financial aid and scholarships, the amount that families actually end up paying for undergrad really has not been changing. That may be different if you're wealthy and you're not getting financial aid, but generally, yeah. Grad school is the place where net tuition has really ballooned out of control.

• 7:32Speaker 04

  That's exactly right. Whenever people like me talk about the $1.7 trillion federal student loan portfolio, a huge chunk of that is actually grad school debt. It's fewer borrowers than undergraduate borrowers, but the debt itself, so much of it, is actually graduate school debt.

• 7:54Speaker 02

  Okay. Well, let's fix that problem then, shall we?

• 7:59Speaker 04

  Here we go.

• 8:00Speaker 02

  All right. So the Trump administration's fix for this problem of ballooning grad school tuition, their idea of capping how much students can borrow. It's important to understand that it is just the latest move in what's been a decades-long back-and-forth over how much to loan students. So caps on how much grad students could borrow from the government were first imposed back in the late 60s. Then, 20 years ago, in 2006, the Department of Education swung the other way and started offering unlimited loans, which lasted until today. And now the Department of Ed is dismantling that unlimited loan program, and we're going back to caps.

• 8:40Speaker 02

  These new caps are just shy of $21,000 per year for most kinds of grad programs. For more expensive programs like medicine and law school, there is a higher cap. And this idea that caps on student borrowing could actually bring down the cost of tuition, it's been around for a long time. Corey told me, at the old coffee machine, I believe, that Lyndon McMahon's Department of Ed, they did not invent this theory, this idea. Where does the story of this idea begin?

• 9:10Speaker 04

  Funny you should ask, Kenny. It begins on February 18th, 1987.

• 9:16Speaker 02

  I didn't expect a specific date, I will say.

• 9:18Speaker 04

  It was a dark and stormy night.

• 9:21Speaker 02

  I'm checking.

• 9:21Speaker 04

  No, actually, I don't know what the weather was on February 18th, 1987, but-

• 9:25Speaker 02

  In what city?

• 9:26Speaker 04

  Well, New York, because-

• 9:28Speaker 02

  Here, let me look at it. I will say, generally drizzly and hazy in New York City on that day. Yes, okay.

• 9:36Speaker 04

  On that date, was published an opinion piece by the New York Times, written by Lynda McMahon's equivalent, the education secretary under then-President Ronald Reagan. All right?

• 9:51Speaker 02

  Okay.

• 9:52Speaker 04

  And this opinion-

• 9:52Speaker 02

  Ronald Reagan's Lynda McMahon.

• 9:54Speaker 04

  Yes, exactly. William Bennett, Bill Bennett. And the opinion piece, the title says it all. He called it "Our Greedy Colleges." All right?

• 10:03Speaker 02

  Oh, okay. Do we have this op-ed?

• 10:07Speaker 04

  Yeah, we do.

• 10:08Speaker 02

  Okay, let's hear it. Let's pull this up and just see.

• 10:10Speaker 04

  Okay. Quote, "Many of our colleges are at it again. They have begun to unveil tuition increases that far outstrip the inflation rate. Next year, tuition is expected to rise 6% to 8%." He argued that increases in federal student aid, quote, "have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase."

• 10:45Speaker 02

  Okay, we should pause there. So that's, that's the whole argument?

• 10:48Speaker 04

  Yeah. And in fact, this idea really took hold. And economists dubbed it "The Bennett Hypothesis."

• 10:56Speaker 02

  Okay. Now, I will say, this does not sound, on its face, preposterous to me.

• 11:01Speaker 04

  No. No, I don't think it does either.

• 11:03Speaker 02

  Yeah. So where my brain goes immediately is- We cover the Federal Reserve. They are responsible for keeping inflation at around 2%. And when they are worried about prices increasing across the economy, what do they do? Well, they make it harder to borrow money. And so, I don't know, is the DOE to some degree not sort of running monetary policy for one product essentially, which is college? And so if they make it harder to borrow money, would that not be the way to fight inflation?

• 11:36Speaker 04

  Well, Kenny, I will leave the monetary policy to you. But I will say, it sounds logical. And I think that's why the Bennett hypothesis persists to this day as a, as a kind of popular idea. The question is, is it actually true?

• 11:55Speaker 02

  Right. When the Bennett hypothesis was hypothesized, it was exactly that, an untested assumption.

• 12:02Speaker 04

  Yeah, there was no real way to test it until 2006, because that's when lawmakers decided to really kind of do the opposite of what Bennett was saying. They decided grad students needed more money, you know, not just for tuition, but for things like rent and food and books, a laptop, while they pursued their degrees. So it was exactly 20 years ago today that they enacted the Grad+ Loan Program, which was the program that allowed unlimited borrowing for tuition, plus all that other stuff. And that move, even though it was, again, likely the opposite of what Bennett had in

• 12:43Speaker 04

  mind, it allowed us to test the Bennett hypothesis.

• 12:48Speaker 02

  Right. It provided exactly the kind of data that you would need to study whether easy access to unprecedented amounts of student loans would indeed result in, how did Bennett put it? Yes, quote, "colleges and universities blithely raising tuitions to sop up more and more of the money."

• 13:08Speaker 04

  Which is why I ended up calling about half a dozen economists and higher education experts.

• 13:14Speaker 02

  Corey had a simple question for all these experts. Is that theory bunk or not? I mean, what do we know for sure at this point about? The Bennett Hypothesis.

• 13:25Speaker 04

  So I poured over these studies by lots of different researchers over the past 20 years about how Grad+ affected students. And I'm going to start with the study that everybody I talked to told me I needed to start with, that is most often cited by Republicans when they say, no, really, this will work.

• 13:47Speaker 02

  Okay.

• 13:47Speaker 04

  So this research was done in Texas, and it was specifically focused on the creation of the Grad+ program in 2006, where graduate school borrowers suddenly went from having capped loans to essentially being able to borrow as much money to cover tuition and fees as they needed.

• 14:11Speaker 02

  So what was the effect of that easy federal money? Well, Corey got on Zoom and chatted with one of the authors of that study.

• 14:18Speaker 04

  His name is Jeff Denning.

• 14:20Speaker 06

  I'm an economist and a professor at the University of Texas at Austin.

• 14:24Speaker 04

  So what Denning said was, they specifically wanted to look at, when borrowers were suddenly able to take out a lot more in loans from the federal government, what effect did that have on colleges' prices in Texas?

• 14:40Speaker 06

  Did it increase the price that colleges were charging for their graduate programs?

• 14:46Speaker 02

  It's like the perfect natural experiment if you want to test the Bennett hypothesis.

• 14:50Speaker 04

  It is the perfect natural experiment. So Denning and his colleagues poured through tons of administrative data from graduate programs all over Texas. And they looked at student-level details like enrollment, graduation rates, financial aid. And what they found is really interesting.

• 15:09Speaker 06

  And the short answer is that we found that the price did go up. Was it, was it?

• 15:16Speaker 06

  Like meaningfully up? Yes. Like, how would you characterize it? Uh, meaningfully up. I would say a meaningful increase in the price.

• 15:28Speaker 04

  Denning told me that for every additional dollar that students received overall in loans, graduate schools increased their prices by 64 cents.

• 15:41Speaker 06

  Two thirds of a dollar, something like that.

• 15:44Speaker 04

  And Denning and his colleagues say that this is a causal relationship that their study found because the students could borrow more, many schools were indeed charging more. Hmm. That's what that study found. Mm hmm. So just in Texas. Just in Texas. But meaningfully. Meaningfully. Okay. Uh, so, great. Bennett hypothesis true. Problem, problem solved. Not so fast, Kenny. Yes, yes. I suspect there's more. So I also reached out to another researcher that lots of folks told me I need to talk to if I'm digging into the Bennett hypothesis. And his name is Robert Kelch.

• 16:23Speaker 07

  I'm a professor of higher education at the University of Tennessee Knoxville.

• 16:27Speaker 04

  So unlike Denning and his colleagues on the Texas study, Kelch, rather than studying a state or an area, he focused in specifically on different fields of study.

• 16:38Speaker 07

  I did research looking at business, medical, and law schools across the country.

• 16:42Speaker 04

  So what was the impact of limitless borrowing on traditionally pretty expensive graduate school programs? And what he found?

• 16:51Speaker 07

  I did not find evidence.

• 16:53Speaker 04

  Quote, "I did not find evidence of the Bennett hypothesis," meaning no evidence that there's a direct connection between student loans and tuition prices.

• 17:03Speaker 07

  There's some evidence in favor, particularly at for-profit colleges.

• 17:08Speaker 04

  But he says it's based on a kind of cynical understanding of graduate school. Basically, that the Bennett hypothesis is a logical conclusion if you're only looking at certain types of schools.

• 17:21Speaker 07

  It's a logical conclusion if you think that these graduate programs are massive profit centers. And some programs, fields like business, can be quite profitable. But other fields, for example, medical school, is wildly unprofitable.

• 17:37Speaker 04

  And Kelchin's point is there are a lot of graduate fields of study that aren't that profitable because they are so expensive for the schools to offer.

• 17:47Speaker 07

  It can take a million dollars of resources to produce one medical degree. So limiting borrowing is not going to reduce that cost.

• 17:56Speaker 04

  You know, the labs, all of the different services they have to provide to students. And you can imagine the schools are operating on a relatively thin margin.

• 18:05Speaker 07

  Even if we assume that institutions raised prices when loans became available, it doesn't mean that they have the space to move in the opposite direction.

• 18:14Speaker 04

  Part of what Kelchin is saying is the reason these programs are expensive for students is they're expensive for the schools.

• 18:24Speaker 04

  So it's not so easy for them to cut prices. It's not that they're hugely inflated. I mean, some are, but not all of them.

• 18:36Speaker 02

  So we've got some serious mixed evidence about whether the Bennett hypothesis could work. Nevertheless, this massive and sudden experiment is going forward today, the day we are publishing this episode. And so the people going to grad school this fall are already scrambling to make it work. We've got more on what the research says about how they're most likely to react after the break.

• 19:07Speaker 00

  Stay tuned for the following announcements and messages from our sponsors.

• 19:12Speaker 05

  This message comes from Rula. World Mental Health Day takes place in October, making it a great time to take that next step in getting support if you need it. Rula makes accessing quality mental health care affordable with sessions costing an average of $15 with insurance. So turn off the talk track that's keeping you from progress and head to rula.com. That's R U L A dot com to find a therapist the easy way. Support for this podcast and the following message come from E-Trade from Morgan Stanley. Discover a wide range of investing choices and banking solutions all in one. Place plus get up to $1,500 when you open a brokerage account with a qualifying deposit today. Learn more at etrade.com/offer.

• 19:56Speaker 05

  Banking products and services are provided by Morgan Stanley Private Bank, National Association, Member FDIC. Terms and other fees apply. Investing involves risks. Morgan Stanley Smith Barney LLC, Member SIPC.

• 20:10Speaker 00

  This episode's sponsor is HubSpot, which offers the following message. What if instead of updating your CRM, your CRM updated you? No catching up on manual edits, no more guesswork. HubSpot's self updating CRM keeps your customer context current and helps you understand what to do next. So, marketing builds more demand, sales wins more deals, and customers keep coming back. Learn more at hubspot.com.

• 20:35Speaker 02

  Okay, so, mixed conclusions on whether and when the Bennett hypothesis is correct, meaning the evidence linking how much people can borrow to how much grad schools charge for tuition, depends on lots of things. But Corey also talked to some other researchers about this new Trump administration plan, which restores the idea of loan caps from 20 years ago. And actually, the loans end up being even more limited than before, because they don't take 20 years of inflation into account. So, so we asked Corey, like, how do the people you talked to think this move is going to play out?

• 21:13Speaker 04

  So, I talked to Preston Cooper at the conservative leaning American Enterprise Institute.

• 21:19Speaker 07

  So, I think, you know, going forward, it's important to remember that the new loan limits are still relatively high, and that actually, most students are already borrowing within the new loan limits.

• 21:31Speaker 02

  These new loan caps are probably only going to affect about 30% of grad school borrowers, because the vast majority of folks, Cooper says, are right now borrowing within the new loan limits. Oh, that's interesting. Yeah, and, and his point is that the point of these new loan caps is basically to put downward tuition pressure on some of the most expensive schools out there, including, by the way, some pretty elite name brand schools. One analysis from the Peer Center found that the two schools at the top of this list with the most affected borrowers.

• 22:08Speaker 04

  Or NYU and USC.

• 22:10Speaker 07

  If students don't go to that absurdly priced university and instead choose a more reasonably priced institution for the same basic degree path, that creates a lot of pressure on the high-priced institutions to actually do something to lower their prices.

• 22:25Speaker 04

  He's put together some fascinating scatter plots that show, say, like a master's in social work and all of the programs in the United States that offer a master's in social work. And you can see he maps where the new loan limits are and the vast majority of programs fall within the limits. But then there are some quite well-known and respected schools who, for one reason or another, are charging two or three times as much for the same degree that you could get at a public university next door.

• 22:59Speaker 07

  Huh. So, yes, I don't want to promise that in the first year where everybody's going to slash their costs and, you know, it's going to, it's going to be great. But I do think that this is going to create, you know, some pressure over time, whether that's through students choosing cheaper institutions or through institutions realizing that they can't just raise the price every year and pass it along to students through the federal loan program. This is going to create some real pressure for cost control in the medium run.

• 23:27Speaker 04

  So in the next couple of years, the Bennet hypothesis could maybe lower tuition. Sometimes, at some places. The experts I talked to pretty much agreed on that. Robert Kelchon at the University of Tennessee, he told me he expects to see at most a small decrease in tuition. Students may become a bit more price sensitive, shop institutions a little bit more. And then Jeff Denning, who was one of the researchers on that Texas study, again, that is most often used by Republicans to justify this move. He told me. It's possible we'll see price cuts.

• 24:06Speaker 06

  It's not out of the realm of possibilities that prices would reduce.

• 24:10Speaker 04

  And a handful of schools have already said in response to this new program, they're going to lower their prices because they know students can't borrow as much.

• 24:19Speaker 06

  There will be less federal aid available. But the question is, how will the private market respond? How will students respond? You know, I don't have a crystal ball. I wish I did.

• 24:30Speaker 04

  So no one has a true crystal ball as to how much, if at all, these caps will bring down the price of grad school. But Corey, how do we think students will respond to this? Do we know that? So Kenny, one of the folks I talked to is another friend of the show, friend of my beat. A regular Cory Turner contributor. A regular Cory Turner contributor. Her name is Dominique Baker. She's an associate professor of education and public policy at the University of Delaware. And she told me that there's really robust evidence around what happens when you cut financial aid for students. And she said, one of the things that most often happens is people just stop enrolling.

• 25:15Speaker 04

  When you cap financial aid, like a student loan, but don't provide some commensurate type of grant or scholarship to help, the number one thing that happens is that students stop going to college. And that is consistent across the research literature. And Baker says, though we're not sure, that's likely going to be true for grad students, too. They're either going to leave school or turn to a private lender to try to get a loan. And Robert Kelchon was also telling me students are scrambling right now to figure out how to pay for school this year. Can they find money of their own? Can they go to the private market and find a loan? Universities are trying to figure out how many. Students are willing to attend if they have to find money from a source other than the federal government.

• 25:59Speaker 04

  So you've got lower income borrowers. What are they gonna do? I mean, you could say, well, they'll go to the private student loan market. But the private student loan market is not what it used to be. And that's because it used to be a key source of borrowing for students. Lots of people leaned on it. But when federal grad loans became unlimited 20 years ago, there was this mass exodus out of private loans into the federal system. So there was little reason for students to take out private loans. And so the private industry shrank. And now it could be way harder to get a private loan. If you're a lower income borrower with, you know, let's just say, a short credit history or maybe a suboptimal credit history, you might not be able to get a private loan.

• 26:44Speaker 02

  Well, let me, if I put my sort of ruthless economic theory hat on here.

• 26:51Speaker 02

  That is what it looks like when demand for a product drops, right? It's fewer people enrolling means fewer people are asking for a college degree or in this case, a graduate degree. And in theory, is that not the signal that is meant to be sent to these grad programs? You're too expensive. People are not going to enroll.

• 27:13Speaker 04

  Yeah, I think there's some truth to that, Kenny. And I also think that's not a bad message to send to some of these schools. I think it's reasonable to tell those schools, we're gonna make this money harder to come by for borrowers because we don't think you're giving them a good return on their investment.

• 27:32Speaker 02

  Right.

• 27:32Speaker 04

  And since they're borrowing taxpayer dollars, you know, the message to these schools is, we're done. We're not gonna lend unlimited money.

• 27:41Speaker 02

  I guess the cruel thing about this particular message to send is that you must use people who want a degree as the messenger. Not that I have a better way to send the message.

• 27:52Speaker 04

  Well, I don't, yeah, I don't know if this metaphor is apt. But the way I, my brain keeps thinking of it is as a game of chicken. I feel like the Trump administration is playing chicken with schools.

• 28:06Speaker 02

  The game of chicken is the administration saying, get your prices down.

• 28:12Speaker 02

  Or else we're not going to use taxpayer-backed loans to send people to your program.

• 28:20Speaker 04

  Get your prices down, or we're going to make it so that you have a hard time filling your enrollment.

• 28:26Speaker 04

  And the trick there is that it's really the borrowers who are the ones having to make those hard choices.

• 28:31Speaker 02

  Does anybody have a better idea for how to get grad school costs down?

• 28:39Speaker 04

  No.

• 28:42Speaker 02

  Yeah.

• 28:43Speaker 04

  I mean, well, there one, one proposal I've heard from folks is like, make the lending program more supple. You know, lend borrowers what is appropriate for their field of study.

• 28:57Speaker 02

  Okay.

• 28:58Speaker 04

  And one of the things the department is also doing, which Republicans created in their one big, beautiful bill, is they're implementing a brand new, what's called a do no harm provision, where all college programs are going to be evaluated on the return on investment to their borrowers. So like, if a college program, if its graduates don't end up earning more than a high school graduate who didn't go to college, that college program is going to lose access to federal loans entirely.

• 29:31Speaker 02

  Entirely?

• 29:32Speaker 04

  Entirely.

• 29:33Speaker 02

  So just, I don't know, do you even call that a cap?

• 29:36Speaker 04

  No, I call it a death sentence.

• 29:40Speaker 02

  Right, right. Well, I suppose some might say that that is a pretty severe incentive to make sure there's a return on your degree.

• 29:48Speaker 04

  Yeah.

• 29:49Speaker 02

  All right, Cory Turner, thank you very much.

• 29:52Speaker 04

  Kenny Malone? I appreciate you asking me on.

• 30:06Speaker 02

  By the way, there are a bunch of student loan changes happening today, July 1st. It's not just this big, giant one. Corey has a big digital story on the NPR website with a choose your own adventure component, so I recommend playing it through multiple times.

• 30:22Speaker 02

  Choose all of the adventures. Corey is also over on her sibling podcast, The Indicator, talking about all of those changes.

• 30:28Speaker 04

  And while you're at it, help us put the planet in Planet Money summer school, please. Give us a tip of some economic success from somewhere outside the USA that the rest of the world should know about. Maybe it's a different way to do home loans or a story about job creation that actually worked. Email us at [email protected] and put summer school in the subject line.

• 30:53Speaker 04

  This episode was produced by Willa Rubin and edited by Mary Ann McKeon. It was fact-checked by Charlotte Isidore and engineered by Robert Rodriguez. Alex Goldmark is our executive producer. Special hat tip to friend of the show, Corinne. I'm Corey Turner.

• 31:07Speaker 02

  I'm Kenny Malone. This is NPR. Thanks for listening.

• 31:24Speaker 00

  Stay tuned for the following announcements and messages from our sponsors. This message comes from Schwab. At Schwab, you can get everything from self-directed investing to full-service wealth management, all in one place. No matter your investing goal, life stage, amount to invest, or know-how, you can invest your way with Schwab.

• 31:45Speaker 04

  This message comes from Google Workspace with Gemini, one subscription that does it all. Personalized AI and premium business versions of Gmail, Google Docs, Drive, and more. Try it free for 14 days at goo.gle/workspacewithgemini.