Will the new student loan limits actually drive down tuition? Economists weigh in

The “Bennett Hypothesis” is a nearly 40-year-old theory alleging that federal student aid enables colleges to raise prices; however, the research is mixed on whether it’s true. One study found Texas graduate programs raised prices by $0.64 for every extra loan dollar, while other researchers found no clear connection, particularly in fields like medicine where costs are inherently high. Illinois NPR interviewed multiple economists, and, in general, they agree that unlimited graduate borrowing was poor policy, but most also expect the new caps to produce only modest price effects at best, citing other cost drivers like “cost disease” and warning that sudden, steep limits could also push some students toward private loans or out of graduate school entirely, especially lower-income borrowers.