Planet Money

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 C