Can the Trump administration make college cheaper?

On July 1st, 2026 — the day this episode came out — the Department of Education dismantled the unlimited Grad PLUS loan program it created in 2006 and went back to caps: just under $21,000 a year for most graduate programs, higher for medicine and law. Education Secretary Linda McMahon's pitch is that giving students less money will force colleges to lower prices. NPR education correspondent Corey Turner joins Kenny Malone to test that logic, starting with a surprise: undergraduate net price (what families actually pay after aid, as opposed to sticker price) has been roughly flat for a decade. The place tuition has genuinely ballooned is grad school, which is why so much of the $1.7 trillion federal loan portfolio is graduate debt.

The idea behind the caps traces to a February 18th, 1987 New York Times op-ed, 'Our Greedy Colleges,' by Reagan's education secretary William Bennett, who argued federal aid let colleges 'blithely' raise tuition — a claim economists dubbed the Bennett hypothesis. The 2006 switch to unlimited grad lending became the natural experiment that let researchers test it, and Turner called the people who ran the studies. Jeff Denning of UT Austin found that in Texas graduate programs, prices rose 64 cents for every additional dollar students could borrow — a causal, meaningful increase, and the study Republicans cite most. But Robert Kelchin, who studied business, medical and law schools nationally, found no evidence of a direct loan-tuition connection outside for-profit colleges: fields like medicine are genuinely expensive to teach — a million dollars of resources per medical degree — so schools have little room to cut.

As for what happens now, Preston Cooper of the American Enterprise Institute notes most students already borrow under the new limits; the caps will hit roughly 30% of grad borrowers, concentrated at expensive name-brand schools — one analysis found NYU and USC top the list of affected programs. The experts converge on a modest prediction: some price pressure at the priciest programs over the medium run. Dominique Baker of the University of Delaware points to the more robust finding: when you cut aid without replacing it, students simply stop enrolling, and the private loan market that might catch them shrank dramatically after 2006. Malone frames the whole policy as a game of chicken between the administration and the schools, with borrowers as the messengers. The episode closes on the new 'do no harm' provision, which cuts off federal loans entirely to programs whose graduates out-earn no one — less a cap, Turner says, than a death sentence.