Here are the historical student loan limits: Historical Federal Student Loan Limits. Tuition increases outpaced student loan limit increases. Lots of reasons for tuition increases, but I suspect that increases in loan limits for students was not an overriding factor.
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Not an overriding factor (and I agree there are many), but definitely a contributor. The “Bennett Hypothesis” and other economic research suggest there is a strong link.
That additional $4,000 a student can borrow in 2026 compared to 1967 is influencing tuition increases? That’s just silly.
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That’s just the federal loan limit (and note that I was referring to “easy access to student loans” and suggesting that limits to that access might help).
In any case, I’m not looking to get into a debate. Please carry on.
Throw in the “amenities arms race” as a key factor in tuition increases, and I’ll happily agree that student loans encouraged modest increases in tuition.
Even on CC- a tiny part of the college-going population, we read college visit accounts and parents and students concluding “the place is a dump”. Why? Dorms built in the 1930’s. Dining Halls which close at 8 pm and the only dining options after hours are neighborhood takeout places and restaurants. No mesclun on the salad bar, the workout rooms for the non-athletes don’t rival a high end health club, the dorms don’t offer entire wings devoted to “suite style” living where every kid gets a single and a private bathroom.
Arms race indeed. And that plays out on three levels financially- the capital expenses to build high end fitness centers/athletic spaces, fancy dorms, upgraded dining halls which are more like commercial food courts, the expenses to retrofit dorms with high speed everything and air conditioning (even in places where the warm weather doesn’t start until June when the kids have gone home). Level two is the increased maintenance costs, the labor to keep all those places open until midnight instead of having everyone clock out when the dinner shift ends, etc. And Level three is the constant upgrading in response to everyone else. College A offers personal training at no cost to club team participants. Not just a dude standing in the weight room making sure nobody hurts themselves- but professional grade trainers. So College B has to constantly benchmark THEIR athletic facilities, weigh the costs/benefits of upgrading.
My kids literally do not believe me when I tell them that dinner ended at 6:30 pm when I was in college, 7 pm for athletes who could order a boxed meal ahead of time and pick it up just as the building was being locked. All freshman showed up with a box fan to stick in the window (my dorm had been built in the 1890’s).
So yeah, it’s possible to run a university with a much lower cost base than the ones we have now. It’s just that families are voting with their feet. They WANT the amenities- costs be ^&*().
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This might be a good time to remind us all that net college prices over the last 10-15 years have decreased, after adjusting for inflation.
Yes, gross/undiscounted COA has increased faster than inflation for anyone who is paying full COA, but…people don’t have to make that choice. For many/most, they don’t have to pay full COA because there are usually lower cost options.
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Over the years I have periodically been interested in the question of why so many otherwise intelligent, organized, and professionally-competent people can end up struggling to make well-designed long-term financial plans. It definitely is not a question unique to student loans, it applies in many different areas of financial planning. And while people muddle through, unforced financial planning errors demonstrably can lead to very serious issues, undermining educational plans, career plans, marriages, mental health, and so on.
Unfortunately this is such a big problem there is no obvious comprehensive solution. The best ideas behavioral finance types have come up with basically involve various forms of default rules that at least are likely to work reasonably well for a lot of people, and to encourage people to use those default rules and be cautious about straying outside of them.
In that greater context, one can evaluate the federal loan limits as a type of default rule about how much it might be reasonable to borrow for your degree. And I tend to think for undergrad purposes, they are in fact pretty well-calculated for that purpose.
And while it would be great if everyone could instead make good individualized decisions applying personal finance best practices . . . knowing what I know, that isn’t a realistic goal, not even for generally intelligent, organized, and professionally-competent people. Some, sure, but most end up needing a lot of guidance and encouragement to follow that guidance.
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If this article needs its own thread, moderators please someone move it and start a new FA thread.
Loan rules would gut aid for thousands of low-paying college majors
"Religious colleges, trade schools and others are lobbying to change proposed federal regulations that would deny loans for programs that don’t lead to higher salaries.
Dozens of higher education groups are lobbying the Education Department to revise proposed regulations that could cut off federal student aid for thousands of programs whose graduates earn meager salaries, including in cosmetology, theology and the performing arts.
Some officials said the impact could be catastrophic for some trade schools and small colleges with low-paying majors and graduate degree programs. For instance, the government estimated the proposed regulations could shut off federal loans to 89 percent of students enrolled in master’s programs for religion and religious studies."
The school where I used to work is on the list. Given that the loan default rate is extremely low, it makes no sense. However, this has been a dream for conservatives for years … Rep. Foxx has tried numerous times to apply this type of earnings test. It may finally succeed, unfortunately.
I have some thoughts on which programs on the list may end up exempt from the rules, but that might be construed as political, so I’m not going to comment.
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I felt like this topic really belongs here, in the FA discussions, but wonder if we should also discuss it in the PF?
These are both paywalled for me.
I couldn’t read the first, but I was able to read the second link. It’s weird how those gift links work.
It is weird! Neither work for me 
Gift link is the short one. Here it is again
Ah yes, I see the difference now in the on screen messages now…I have to create a free account to read the gifted article, so not going to do that. #sorrynotsorry 
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Never heard of having to do that for a gift link
Yeah, that is how WaPo gift articles work. Same for me (and I also do not want to create an account), it looks like this:
What I generally do is just go to a sleazy internet archive site to read things like this (which makes me imagine a cartoon guy opening his trenchcoat to sell you illicit goods on a streetcorner, “hey buddy…”)
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That’s unfortunate. There is a lot of info in the article.
Isn’t that already somewhat the case? Physicians, dentists, lawyers, etc. who start out with hundreds of thousands of dollars of debt are much more financially constrained in their personal and professional lives than those who start out with no debt.
Of course, there are also lower paying career paths like visual and performing arts and social work that are much less accessible to those without parental financial support.