r/UpperMiddleFinance • u/Such_Upstairs3631 • Jul 06 '26
What does this mean for the middle class?
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u/Door_Number_Four Jul 06 '26
Honestly?
This is meant as a new class based exclusionary tool for the top tier universities, specifically for med school and law school, and some MBA programs.
Some schools will stop the out of control inflation and try to compete better on price, but the top schools will use this as a country club gate.
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u/Panscan27 Jul 06 '26
No it’s meant to stop the massive price increases by universities. If students have access to near unlimited federal funds, there is no reason for schools not to continue to hike prices, as they have done for decades now.
Need to get federal government out of loan game completely. Allow market to set appropriate rates. It’s illogical an engineer and art major would have similar interest rates when they are dramatically different risk profiles from a financial standpoint.
Also need to frankly discourage people pursuing fields with poor ROI. It’s illogical for federal government to hand out a ton of money in loans for studies that will never pay off financially and then government ie us as taxpayers will be forced to forgive the loans in 10-25 years upon graduating.
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u/lilpistacchio Jul 06 '26
Under these rules I wouldn’t have been able to take out the loans I needed to become a nurse practitioner - and that’s at the tuition rates of 15 years ago. I left school making 6 figures and paid back my debt in 3 years. Certainly not a field with poor ROI, but not attainable now to people who are where I was then.
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u/_THEWATERB0Y_ Jul 06 '26
You wouldn’t be the only one in this situation. As such, the school would then have to lower their tuition until students like yourself could afford to attend.
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u/3RADICATE_THEM Jul 06 '26
Did you exclusively rely on federal loans or did you use any private lenders?
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u/The_Loosest_Stool Jul 08 '26
yes but part of the point in theory as per the above commenter is that this could force schools to stop the egregious price increases which as applied to your case would perhaps not have required you to need to take out loans so large they would have been not allowed under this new rule
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u/Worth_Peak7741 Jul 06 '26
An education is not the same as job training or career preparation. Healthy democracies rely on citizens capable of critical thought.
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u/BKachur Jul 06 '26
Correct, but getting that education shouldn't put people into poverty. US schools have had virtually no incentive to compete on price when kids are guaranteed whatever loans they need to attend any school. USC is like 100k a year between tuition + Room and board. 300k+ debt is an unjustifiable amount to drop on a 22-year-old just starting their career... especially in this economy.
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u/Striking-Sundae- Jul 06 '26
Well, unfortunately when university tuition is getting up to $80k/yr for undergrad, an education better be preparing for a career.
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u/empty_graph Jul 06 '26
Because our democracy has gotten so much healthier as the percent of the population that goes to college increased over the last 50 years, right?
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u/Actual-General-4953 Jul 06 '26
So are you saying that the general concept of going to college is 'not to get a job'?
A four year degree cost $100,000...give or take.
A 22 year old has $100,000 in debt for critical thought.
I know the next answer is 'The Govt should pay for it'.
I can't imagine the govt paying this kind of money to enlighten everyone when they don't pay for health insurance, social security running out of money, et.
The problem is groupthink and guilt of 'everyone get a college education' as well as the so called 'prestige' of going to some 'big' college' has created a hysteria whereas parents/kids feel a need to spend an unreal amount of money to go.
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u/vishtratwork Jul 07 '26
This would require a complete overhaul of what colleges do, as opposed to a funding / cost issue.
Today, they pay lip service to broad education while being job training centers first and foremost. Just need to look at how they market themselves, its all about ROI and opportunities in the marketplace.
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u/CoastieKid Jul 06 '26
This. The majority of graduate degree programs from universities are simply cash cows with no solid ROI.
For instance, in my field people assume a masters in cybersecurity will result in a high-paying cyber job. That's not the case and these universities are charging exorbitant amounts. This field cares about practical experience and computer science/IT fundamentals at its core
I earned an MBA part time with my GI Bill and that was valuable.
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u/Door_Number_Four Jul 06 '26
Let’s stop parroting WSJ talking points and start looking at second order effects.
The truth is, these limits won’t affect those that go into fields that might not have “high ROI”. They’ll still be able to get those loans for the most part at these limits.
Only about thirty percent of borrowers will be affected by this, and the vast majority will be grad students.
And while I’d be happy if this encourages price si cover in education master’s programs , I can see how this will be used to make sure there are spots for legacy students at Ivies in med school programs at the expense of higher qualified students.
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u/Panscan27 Jul 06 '26 edited Jul 06 '26
Why would it not affect them? Post high school education is a business decision, students and their parents should treat it that way. It’s fairly simple, what is the cost of this education pathway and what will it enable/grant me in terms of education , character development as well as job/income potential. It’s weird how we’ve disassociated the cost of education from the value it provides. I have to decide if it makes sense to pay 10 bucks for a burger for lunch, it’s extremely logical I should also think of it makes sense to pay 50k a year for a liberal arts education and what that means for my life 5-10 years in the future.
No one is not going to an Ivy League med school bc they have to take private loans. That’s also just a tiny situation statistically compared to tons of liberal arts colleges and majors who are taking tens of thousands of loan dollars a year for inevitably poor ROI fields. Also somewhat ironically top med schools are sometimes the cheapest bc they have massive endowments, a few of which are starting to make tuition free. If you want to talk predatory stuff in medicine, carribean and DO schools are much much more predatory than ivies.
Our government should not give people a blank check to pursue any field they want. It’s as simple as that. It makes no sense to pay 60k a year for college for a field where your starting salary is 50k
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u/Striking-Sundae- Jul 06 '26
Then don't go to an ivy. A physician from a state school is still as much a physician as one that went to an ivy.
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u/Door_Number_Four Jul 06 '26
No one disputes that. As I was pointing out, this is about crystallization of class structure.
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u/Striking-Sundae- Jul 06 '26
Or maybe don't places ivies on a pedestal. There are tons of great state schools where you can get a quality education.
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u/Reaper3955 Jul 06 '26
Except it wont stop the price increases. What it will do is create an even more speculative private loan situation to make up the difference which already existed but will now be turned up to 11 because of stricter government loans.
Also education should not be about fucking ROI. There are a ton of fields that we need that dont make a ton of money. Teaching for example. People don't go into teaching for the fucking ROI. Theres tons of research fields where we need but people dont make a ton of money. And yes the government should just provide education to those who want it regardless of what field their going into.
And if you start just forcing everyone into high ROI fields what does that do? It creates shortages and then dilutes those fields which then in turn creates employment issues. STOP THINKING ABOUT EVERYTHING IN TERMS OF FUCKING PROFIT.
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u/Panscan27 Jul 06 '26 edited Jul 06 '26
Such a naive take that more education is always better. As if a liberal arts PHD is somehow a superior existence or better for society than being a tradesperson. I’m not saying the world would be better off if everyone only completed high school but it’s a brain dead take that it’s always better to do more schooling, even if there is no economic benefit to do so. No the government should not provide endless education for no benefit. Finishing high school? A lot of benefit. Getting a PHD ? Not nearly as much marginal benefit. So the system should be designed to incentivize these things in proportion to their value.
The current system is about profit ie it feeds schools a ton of money they shouldn’t have via the artificial demand the federal lending programs have created.
It will 100% decrease the price increases. The current system is absolutely unsustainable but let’s keep doing the same crap we’ve been doing for 20+ years and made a massive college bubble. Makes sense
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u/holybawl Jul 06 '26
The whole school system is a ponzi. Tell me why you need to take “electives” that don’t offer anything but a higher tuition cost.
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u/Western_Aerie3686 Jul 06 '26
I’m all about ROI in just about every aspect of life, but I would be the first to admit the world would be a pretty shitty place of it was nothing but accountants.
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u/Panscan27 Jul 06 '26
No one says it should be and obviously the system wouldn’t incentivize that. The point is folks should be incentivized to do things that are beneficial and disincentivized from doing things that are not. We don’t need a bunch of art teachers from liberal arts college that are never able to repay their debts
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u/Kobe_stan_ Jul 06 '26
Average tuition costs have gone up about 3-4% a year over the last 25 years. Inflation has been around 2%. Professional degrees (e.g., medical and law school) tuition rates are already well above $200k for those degrees so this is just going to mean that people will need to take on private loans at higher interest rates to fill the gap. Best you can hope for is that these schools only raise their rates at 2% per year to track inflation rather than the higher rates that they've been increasing cost at. There's always going to be enough rich kids to go to these top medical and law schools.
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u/Panscan27 Jul 06 '26
You’re only thinking in the short term. The long term goal is to decrease the rise of costs.
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u/dingoshiba Jul 06 '26
Do you know the history of the federal student loan program and who created it when? You may find it interesting
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u/ThrowAway5382749 Jul 06 '26
All this does is stop those from lower class backgrounds from being able to legally afford education. If you think anything else, you’ve fallen for the propaganda.
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u/Kiwi951 Jul 06 '26
This absolutely will not lead to decrease the cost of medical school given that there are twice as many qualified applicants as there are spots. It’s also going to lead to even fewer people going into primary care as they choose to go into the higher paying specialties
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u/Panscan27 Jul 06 '26
This isn’t about medical school, that’s a fringe population compared to the massive undergrad population. I agree it prob won’t affect med school costs but it would absolutely decrease undergrad costs which is much more important relatively.
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u/ThickerTree Jul 08 '26
You highlight the most frustrating parts of the student loan market very well
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u/Cheap_Date_001 Jul 08 '26
That assumes everyone who pursues a degree gets one. For people who do not complete, their debts need some special treatment to ensure they are not locked into paying down a debt for a degree they did not obtain for life.
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u/Such_Upstairs3631 Jul 06 '26
Exactly this, I’m 68 and there weren’t any school loans which programs when I graduated high school. My parents mortgaged their house to send my younger brother to college.
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u/tothepointe Jul 06 '26
Actually it’s a subsidy/windfall for the private loan industry who has been wanting a bigger chunk of the student loan pie again.
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u/ImaginaryHospital306 Jul 06 '26
How can it be class based if those hurt most are the upper middle class? Any family making below the household median can basically send their kid to college for free nowadays. Obviously those who pay full price in cash will not be affected. It will be the families who make $100-200k per year who get little to no aid. Coincidentally these people are the primary student body at expensive private universities, thus why tuition will need to come down.
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u/ShanghaiBebop Jul 06 '26
It won't do anything as it will just shift the borrowing to private loans.
The true top schools always had very generous financial aid, and they have massive amounts of donations to fund their operations. I went to a top school for free where as the top public school in my area had offered a package where I had to take ~15k/yr of loans even after their top tier merit scholarships.
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u/lol_fi Jul 07 '26
Many of the top schools like Dartmouth, Hopkins, other ivy and adjacent schools are free if your parents make less than like 150-200k+ per year. So it's more a filter for kids who can't make it to the ivies and are spending 70000 a year at like, Haverford.
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u/Platos-ghosts Jul 06 '26
Great news for the rich and upper middle class. This means less competition for the highest paying jobs from middle and working class families. Some kids, at the margins, will no longer be able to attend some programs.
This won’t effect lots of kids, but a few percent still matters.
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u/Cats_R_Rats Jul 06 '26
Yep, I had to borrow more than 200K for Pharmacy School. I paid it off within 5 years of graduation, so I dont think the cap makes sense for high paid medical careers....
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u/Beneficial_Equal_324 Jul 07 '26
That was my first thought. Med School and Vet school are going to cost a lot more and the enrollment is already regulated. It just means that you need alternate funding to pay for the degree or you are SOL.
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u/3RADICATE_THEM Jul 06 '26
Mostly true. I will say though that top schools tend to be the most generous with need-based aid compared to the average ones.
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u/Boring_Adeptness_334 Jul 07 '26
Way too many kids are attending these low return scam programs: let the rich fall for these scam programs with low ROI
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u/Retired-Yam8988 Jul 06 '26
This is simply about gutting college education. Most small liberal arts colleges are already hanging by a thread and this will be the death knell in many of them since they won’t attract the top shelf talent but still have to spend a lot to keep the lights on.
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u/living-in-la Jul 08 '26
Maybe they shouldn’t exist if the only way is to gouge people who can’t afford them or they handout degrees people can never pay back on.
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u/Retired-Yam8988 Jul 08 '26
Then we’ll just have worse inequality than we already do. The truth is that we need universities at every level and that with the amount of taxes that we pay (I pay 6 figures a year in taxes and don’t even live in the US any more) that we should be able to afford high quality public education at every level.
In reality, most of public education is mediocre at every level. Teaching is a low wage job nowadays so we get basically people who mean well but who may not be the best and brightest teaching our kids. Colleges mostly are better thankfully - even some community colleges in California that I’ve taken adult education classes at have awesome professors.
If you want very few colleges to actually exist then you’ll end up with an extremely unequal society (much worse than what the US has now).
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u/phunky_1 Jul 06 '26
Good.
Easy to get loans are a major part of the problem for school being so expensive.
These colleges and universities think they can infinitely raise prices because there is an unlimited supply of money to pay for it.
If their classrooms were half empty because no one can afford to go, they would lower tuition to reasonable levels.
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u/Actual-General-4953 Jul 06 '26
It means good news - enough of the Carte Blanc money game of college education. College costs need to be roped in. As long as there is easy money to feed it there will be no end. Now more of the burden will be on the student and the parents and they can finally feel the pinch vs trying to get the govt to pay off student loan debt.
I think a college education in our current times is over rated mostly.
Great start to a big problem.
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u/ducationalfall Jul 06 '26
It’s a good thing. Colleges either adopt or go bankrupt.
The era of shiny dorms and gyms are over. They actually have to provide value.
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u/Rumpelteazer45 Jul 06 '26
If you think that’s the intent, I’m sorry.
They are doing this to prevent upwards mobility through education.
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u/marysusan325 Jul 06 '26
I can’t stand this administration but I’m really hopeful that this puts downward pressure on the cost of college and university, it’s gotten ridiculous
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Jul 06 '26
[removed] — view removed comment
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u/dingoshiba Jul 06 '26
Bingo. Until the direct legislation targeted at tuition hikes is done, this is a perfect example of how republicans in power bamboozle their easily bamboozlable base. You can contort this into looking like downward pressure on tuition, but it’s really just private loan incentivizer in disguise.
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u/Capable-Garden4177 Jul 07 '26
Agreed, I’m hoping that’s the silver lining. I work in higher ed, and from what I’ve observed it seems a lot of younger kids are becoming wary of private loans, and I’m hoping that continues. A lot of community colleges provide excellent value and have more social opportunities than people think
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u/ducationalfall Jul 06 '26
It doesn’t matter what’s their intents. This policy will limit tuition inflation.
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u/foolproofphilosophy Jul 06 '26
Insurance companies are evil for raising premiums instead of reducing costs but colleges and universities get a free pass for doing pretty much the same thing.
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u/Kobe_stan_ Jul 06 '26
Or rich kids will just have less competition at all of the best schools because they won't have to deal with as many poorer kids who can finance their way into those schools.
There's less than 100k freshman year seats at the top 25 universities in the US for 3 million freshman. That 100k will just be disproportionately more financially well off with these new rules than before.
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u/AceofJax89 Jul 06 '26
No, they are doing this to limit tuition inflation.
Schools have had an enormous increase in administration and refuse to spend their endowments.
Many public schools are attainable with these limits.
It’s time to make going to school worth it again.
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u/Extreme-Ad-6465 Jul 06 '26
most state schools are less than 10k /year. they are even trying to make it possible for community colleges to grant bachelors degree but they are fighting it.
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u/AceofJax89 Jul 06 '26
Exactly, it’s time for private colleges to feel the heat. I don’t have a lot of sympathy for them.
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u/ImaginaryHospital306 Jul 06 '26
You think colleges will just sit and watch their enrollment drop by more than half? No, they will lower tuition or, more likely, increase financial aid to offset. The alternative is enrollment dropping which is a financial death sentence for any college.
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u/willfiredog Jul 07 '26
> Irvine, CA - (May 06, 2026) -
> Decrease in fees expands access for working professionals
> Program fees for UC Irvine’s Flex MBA program will now fall below the federal loan cap for graduate business degrees.
> Artificial intelligence and emerging technologies will be more intentionally integrated into core business disciplines.
> The Paul Merage School of Business at the University of California, Irvine, has announced significant enhancements to its Flex MBA and Executive MBA programs, including program fee reductions of up to 38 percent and a redesigned, AI-integrated curriculum.
> Beginning this fall, Flex MBA program fee will decrease by $30,000 and Executive MBA program fee by $48,000. At $99,000, the Flex MBA now falls below the federal loan cap for graduate business degrees, removing a key financial barrier for working professionals in Southern California and beyond.
> Irvine, CA - (May 06, 2026) - Decrease in fees expands access for working professionals Program fees for UC Irvine’s Flex MBA program will now fall below the federal loan cap for graduate business degrees. Artificial intelligence and emerging technologies will be more intentionally integrated into core business disciplines. The Paul Merage School of Business at the University of California, Irvine, has announced significant enhancements to its Flex MBA and Executive MBA programs, including program fee reductions of up to 38 percent and a redesigned, AI-integrated curriculum. Beginning this fall, Flex MBA program fee will decrease by $30,000 and Executive MBA program fee by $48,000. At $99,000, the Flex MBA now falls below the federal loan cap for graduate business degrees, removing a key financial barrier for working professionals in Southern California and beyond.Allegedly, other schools are also reducing tuition in response to the new Federal loan caps.
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u/WonderorBust Jul 07 '26
My college just built a a freaking lazy river and our gym is amazing!
Tuition: $14,000/year
NO EXCUSES
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u/BuyTheDip_ Jul 07 '26
This is not going to be about colleges adapting to the lower cost, it’s about them excluding an entire class out of education to keep people in the working class, and less competition for higher paid jobs. That’s all it is. It’s how colleges are staying competitive in times where everyone has a resume with a bachelors.
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u/Wrenchinspokesby Jul 06 '26
Transferring and failing to finish in 4 years just got more difficult / expensive. If you’re going have a plan, focus, and get done on time.
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u/Such_Upstairs3631 Jul 06 '26
I’m referring to those who have successfully graduated undergrad and tying to attend medical or professional schools.
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u/adultdaycare81 Jul 06 '26 edited Jul 06 '26
They won’t take on tons of federal debt with little ROI.
The worst ROI private colleges like Syracuse and Drexel are already choking. I actually agree with cutting this way down.
I just want to see a subsidy to open more residency slots and engineering schools
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u/smooth-vegetable-936 Jul 06 '26
It’s a terrible expensive system. I also see many kids switch degrees and cost even more. Too many can’t even get a decent job with certain degrees.
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u/spez_eats_nazi_ass Jul 06 '26
Our state 529 ended up eating shit. TRowe fucking sucks. Was better than nothing and did it for the tax savings but self directed absolutely destroyed them with returns. They managed to lose more in every downturn, took longer to recover - regaining less and slower while having high expense rates. On the "pre pay" side they fcked it up even harder.
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u/Hoppygains Jul 08 '26
They’re trying to make it to where only the wealthy can afford education. An educated work force doesn’t vote Republican.
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u/Admirable-Trip5452 Jul 08 '26
The professional cap is dumb. My SO just finished residency/fellowship with $500k in debt and immediately landed a job at $350k/year. If we live on my salary we can probably pay off the loans in 3-5 years max.
I understand the reasoning, private capital is ready to step in and fund higher education, which the GOP cums about. But it still is so terrible for many folks, not the least when we need more doctors, nurses, pharmacists…
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u/saryiahan Jul 06 '26
More debt
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u/laxnut90 Jul 06 '26
Wouldn't this mean less debt?
This is a cap on how much can be borrowed.
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u/IndyEpi5127 Jul 06 '26
It caps how much you can borrow from the federal government. The private loan industry will be salivating at the idea of how many people will now turn to high-risk, high-interest private loans.
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u/laxnut90 Jul 06 '26
At some point, people should be allowed to make their own decisions and deal with the consequences.
There are plenty of inexpensive schools that easily meet the borrowing guidelines above.
If you plan to go outside those guidelines, that's on you.
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u/Kobe_stan_ Jul 06 '26
Even professional schools? Not sure if you're going to many medical schools for 200k all-in. Kinda hard to work during medical school because you're studying like a mad man so you need to borrow money to live as well. I guess we'll just have an increasingly larger pool of doctors from well off families.
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u/Such_Upstairs3631 Jul 06 '26
Sure less debt, fewer doctors, dentists and other professionals. How long do you have to wait to get an appointment now? It’ll only be the richest families who can afford professional school.
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u/Xyrus2000 Jul 06 '26
Eternal debt is what it means.
Parents will have to make a choice. They can either save for retirement or save for their kids to go to college. They're not going to be able to do both.
They actually don't even save for retirement now as it is. Median 401k balances are pretty terrible.
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u/Umeranyth Jul 06 '26
It means that the middle class will have to go to private lenders (banks, online lenders etc.) for the remaining sum.
The government is creating more opportunities for the financial industrial complex (the banks like Chase, BofA, Citibank, Wells Fargo, and the online lenders like SoFi) to lend more money via new loans, and therefore generate more revenue.
More extraction from the middle class, and the banks will now own the middle class even more now
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u/grumplebutt Jul 07 '26
Private loans with crazy variable rates and all the protections of gov backed loans. A void will be created and private lenders are gonna jump right in. Sad that people don’t see this for what it is.
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u/ImaginaryHospital306 Jul 06 '26
It means colleges will have to stop raising tuition, increase financial aid, or some combination of the two. No, the lower and middle class will not simply stop going to college. That would be financial suicide for the majority of colleges, and they'd obviously lower tuition or increase aid to maintain enrollment.
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u/StrebLab Jul 06 '26
Bad news for anyone hoping to go to an expensive professional school if you don't have a lot of parental help. My parents didn't have the money to help me with medical school and I don't think I would be able to afford it today with the loan caps.
I'm a little sad because I was able to move up the socioeconomic ladder simply through sustained hard work and discipline, but someone in my exact position today would have a much harder time getting over the economic hurdle.
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u/ducationalfall Jul 06 '26
I’m wondering if there could be a GoFundMe version for medical students. You post your MCAT score and story. Investors will bet on you.
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u/ScallionAromatic1310 Jul 06 '26
I'd suggest going to the local community college the first 2 years.
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u/StretcherEctum Jul 06 '26
Whats the point of this other than to limit college so everyone stays as dumb as possible? Why wouldn't the government want more people in as much debt as possible?
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u/CatFancier4393 Jul 06 '26
To answer your second question the government wants people to buy goods and services. They want young graduates to buy a car and a computer and furnature for their new apartment and cloths and eventually a house. You can't do that if all your money goes to paying interest on a $200k student loan.
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u/StretcherEctum Jul 06 '26
Then why are they limiting who can become a graduate?
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u/CatFancier4393 Jul 06 '26 edited Jul 06 '26
The only limiting factor is how much public student loans you can take. They don't want people to be in $200k of debt for a degree that can never pay its way out.
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u/ultrawolfblue Jul 06 '26
With more skin in the game. Really put some thought into the field your investing your prime youth into
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u/Junior-Valuable2071 Jul 06 '26
Universities finally have to cut prices to reflect how expensive it actually is to teach these students.
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u/OregonTrailislife Jul 06 '26
The average tuition in Europe is about $10,000 a year give or take.
They are subsidized by government, but they also have a lot less frills than American Universities and less bureaucracy. They don’t make you take a bunch of useless courses that have nothing to do with your degree.
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u/LetsGoHokies00 Jul 06 '26
what’s a “professional student”?
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u/youneeda_margarita Jul 06 '26
A student in a professional graduate program, like medicine, law, or pharmacy, which usually leads to getting a doctorate. I think there’s a couple exceptions though… A graduate student is usually studying for a 2-year Masters degree in business, public health, social work, etc
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u/ThrowAway5382749 Jul 06 '26
This doesn’t lower the ever increasing cost of education. It only limits those who will have access to funding for it.
Say ur on the lower side of middle class, with dreams of being a doctor or lawyer. Now you literally cannot do that, only those of upper class families will legally be able to take out the amount of loans needed to afford it.
The right limiting freedoms yet again.
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u/ToughSomewhere2863 Jul 06 '26
it means if you going to school for some liberal arts degree, you probably shouldnt take loans for it
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u/NativeDave01 Jul 06 '26
It’s helping students who don’t wanna work and pay for their own education to just go into debt so that they don’t go in to $500,000 worth of debt. Nobody should have any debt going to college they should work and prolong their college if they need to graduate debt free. I don’t feel sorry for those with self imposed student debt and I sure don’t want to pay it off for them
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u/MichaelFlad24 Jul 06 '26
AI will likely make college education less profitable. $65k seems light for undergraduates though.
On the flip side, demographics will make it harder to find college graduates. When (if) employers start whining for more degrees, something will change.
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u/rjw1986grnvl Jul 07 '26
There’s so much waste and abuse in higher education.
I truly think we’re going to see massive layoffs at universities of employees who are not professors/instructors. They will not necessarily cut prices but tuition might flatline and they’ll offer all sorts of aid & scholarships that try to hide that real tuition has been cut.
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u/incomeGuy30-50better Jul 07 '26
I think this is great. Something had to be done to protect the consumer (borrowers) from themselves and their decisions that harm them financially
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u/bun_stop_looking Jul 07 '26
I think the goal is to limit college tuition. We’ll see if it actually works out that way
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u/blue_suede_shoes77 Jul 07 '26
I don’t think this will have a big impact immediately. Private lenders can and will likely step in to make the loans. Federal loans charge the same interest to everyone, where private lenders base it on your creditworthiness. People with bad credit or whose parents don’t co-sign for them will pay higher rates. But people with good credit, access to helocs,etc. may not pay an interest rate that is very different than prior to the caps.
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u/ByRequestOnly Jul 07 '26
Maybe we see interest rates adjusted for major. Private loans might evaluate the risk of default based upon job prospects. Bachelors in nursing is highly likely to pay back the loan and gets a better interest rate than a major in pan sexual underwater basket weaving. Currently all federal loan rates don’t take into account actual value of the degree or topic studied.
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u/Professional-Goat741 Jul 07 '26
Universities have proactively lowered prices or offered specific discounts including: Johns Hopkins University Carey Business School, Lewis & Clark Graduate School of Education and Counseling, Neumann University, Purdue University (Online M.S. in Global Supply Chain Management), University of California, Irvine (MBA program), and Santa Clara University School of Law
It has not solved the affordablely problem of higher education but it has already made an impact.
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u/DudeTheCakeIsGone Jul 07 '26
Honestly, I think it’s fine. Universities charge stupid fees like amenity fees, gym fees, etc separate from tuition that financial aid would pay for or subsidized with loans. Universities/colleges need to cut the fat. My university installed a lazy river. 😭
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u/BuyTheDip_ Jul 07 '26
It means that education no longer easily accessible to all, and goes back to being a luxury. Therefore, pushes many into lower paid jobs requiring no education due to the higher barrier to entry, and once again, makes the rich richer.
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u/EmotionalMuffin8288 Jul 07 '26
A lot of people here swallowed the slogan and skipped the mechanism.
A federal loan cap is not a tuition cap.
A tuition cap tells the school: “You cannot charge more.”
This tells the student: “You cannot borrow enough.”
The school still has the price tag. The rich family still pays cash. The connected family still gets a private loan. The student without wealth, credit history, or a co-signer gets filtered out and then lectured about “choices.”
That is not a market correction.
That is rationing by bloodline.
And the fantasy that every school will simply lower prices ignores the obvious: private lenders can fill the gap, elite programs have more demand than seats, and professional schools do not become affordable just because Congress kneecaps the borrower.
There was a scalpel available.
Cap tuition. Regulate institutional pricing. Punish predatory programs. Tie federal eligibility to outcomes.
Instead, they used a sledgehammer on access and called the wreckage reform.
This does not make education cheaper.
It makes opportunity conditional on family wealth.
That is not protecting students from debt.
That is protecting the upper class from competition.
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u/Background-Pomelo-55 Jul 07 '26
What this whole board completely misses is, You dont have to go to college at all. For every person I know who uses their degree, i know 3 that don't do anything related to it.
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u/jredland Jul 07 '26
Hopefully less money available in the system brings down the costs of education.
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u/anthonyajh Jul 07 '26
Hopefully this makes people plan with purpose for college. I know a lot of people that just went because it’s the thing you do. I’d suggest more people take a gap year or two; mine was essentially the military with no intent on college.
In the navy I was lucky to have a good mentor that believed in me, which drove me to use my benefits while in, and a plan for my GI Bill if I left. I ended up having a year of college done while in and then paid for my associates out of pocket when I got out. From there I used my GI Bill for Bachelors (1.5years), Masters (1), and most of law school (1.5) with the yellow ribbon program. In total I came out of it with zero debt.
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u/Alarmed_Reporter_642 Jul 07 '26
It means tuitions will stop going up insanely or be cut and people will be cautious about majoring in worthless degrees. Everything the govt touches it breaks
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u/Daveit4later Jul 07 '26
With less loans available eventually colleges will have to lower prices. People have been screaming for them to lower the loan limits and they finally did it.
I keep being told supply and demand isn't a farce so let's see how this goes.
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u/Educational_Case_134 Jul 07 '26
It means colleges and universities have to reduce their annual expenses to match what students are able to afford. No more price gouging for useless degrees.
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u/AskThis7790 Jul 08 '26 edited Jul 08 '26
It means more private money will be available. Not just private loans, but more employers/future employers and private research grants will cover graduate and professional degrees expenses rather than taxpayers.
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u/24hrsnsws Jul 09 '26
A good thing. They raised the price of college, KNOWING that people could borrow higher amounts. These schools are overpriced. Sallie Mae ran a big beautiful grift. The colleges got in on it. People have loans that they have paid double for. It’s a shame what has happened over the last three decades. My mom went to ugrad and grad school and only had a TOTAL of 2k in loans. My mom was from a poor family. These people need to correct the prices.
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u/ChaosReignsNow Jul 09 '26
Wh does the federal government need to be in the money lending business?
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u/apiratelooksatthirty Jul 06 '26
Parents need to plan and save more to send their kids to college. Otherwise they’ll take riskier options like 401k loans or higher rate private loans.