Planet Money · Wednesday, July 1, 2026
The Trump administration's strategy of capping student loans to lower tuition is rooted in a theory proposed by William Bennett in 1987, known as the 'Bennett hypothesis.' This hypothesis suggests that increased federal student aid allows colleges to raise tuition without impacting student enrollment.
“The administration's logic is based on this sort of old idea. And that is that if there's a lot of federal student aid floating around in the higher education marketplace, colleges have no incentive to lower their prices.”
“So when the Bennett hypothesis was hypothesized, it was a-- it was an untested assumption.”
“Quote, many of our colleges are at it again. They have begun to unveil tuition increases that far outstrip the inflation rate. Next year, tuition is expected to rise 6% to 8%.”
“An economist dubbed it the Bennett hypothesis.”