In the 1980s, the majority party in Congress saw demography claims that people with college educations made more money than those without.  Universities began to lobby for student loan changes. Many smaller private schools were facing funding crunches and people going to college would fix that.

The drumbeat for equitable treatment for the poor got louder and as part of other governance, Congress included changes that made so student loans, which originated thanks to President Johnson in 1965, were now unlimited. Because governance is governance, a Republican president signed it over the objections of those who said it was turning a Bachelor's degree into the new high school diploma. Nearly everyone would have one, except with debt.(1)

Cut to 40 years later and that same political party began saying America's best and brightest, those who went to college rather than becoming the plumbers and electricians, were naïve waifs who had been duped by banks into signing loans. The universities were not to blame, politicians didn't want students mobilized against them the way academics have mobilized schools against Jews, but faceless banks who did what Congress told them to do by law.(2)



Universities acted like they were on a divine mission but that mission included increasing profits - tuition has been nearly 500% inflation, and that is without the housing, fees, and "microtransactions" they added on. Eventually we got a university culture so exploitative that Columbia charged $80,000 for a two-year specialization in...environmental journalism.(3) That is just one ridiculous example.



The new tax bill unravels some of that and it will force a reckoning across academia. It will mean more adjunct teachers, less tenure unless you are a grant rainmaker, and a lot fewer new buildings.(4) Even medical and law schools will have to adjust. As Obamacare becomes entrenched, average salaries for physicians will go down, so young people won't incur $400,000 for medical school debt when it will take 20 years to pay it off. Especially when Grad PLUS loans, passed by a Democratic Congress in 2006 to give all the people who now had genetic Bachelor degrees a graduate degree, are capped at $200,000 starting in 2026.

Hysteria about the collapse of healthcare aside, schools will adjust their prices, the same way modern media reality means there will never be another Graydon Carter running Vanity Fair. Costs only skyrocketed because loans were unlimited. Medicals schools that charge $391,000 are going to lose a lot to those who are at $200,000 and they will adjust or else their graduates will be 'rich dumb kids' the way some undergraduate colleges pivoted before unlimited student loans. Law schools will be hit even harder. The proving ground for AI tools will first be paralegals and then attorneys. They will still exist, just like bank tellers exist in a world of ATMs, but there will be a lot less.(5) That may not be worth $200,000 in debt.

The new change is actually doing students a favor. New York University has under 3% of its revenue from GRAD Plus debt for nearly 7,000 students whereas something called Nova Southeastern University gets 38% of its revenue from those loans for its 7,000. That does not mean NYU is just for rich kids, GRAD Plus loans are not increasing graduates from underrepresented communities, it means some schools are exploiting loan culture. Nearly 80 percent of Burrell College of Osteopathic Medicine students get GRAD Plus loans. They are paying up to $400,000.



Osteopaths who now form the bulk of primary care and ER providers are the people that an entire political party claims were being exploited because they didn't understand how loans work? 

It makes that Columbia certificate in Environmental Journalism look downright intelligent.

NOTES:

(1) it is easy to see how so many college-educated people don't know how loans work when you read people talk about this issue. They blame Nixon and Reagan for the student loan problem and insist it was to help 'the rich' when they signed it to get legislation they needed passed by Democrats. I assume 40 years from now clueless people will blame George W. Bush for the decline in nuclear energy even though Clinton banned it and Bush only put an anti-nuclear activist in charge of the Nuclear Regulatory Commission because Democrats stopped approving all federal judges - and said they would continue to stall them until he did what they wanted.

(2) Plumbers and electricians asked the obvious questions; should you sign for a loan if you don't know what one is? And why are we forced to pay off the loans for French Poetry majors because they now work as waiters?(1) People in the trades know how money works, it is not an abstract concept, so they know $40 trillion in debt with more added is a bad thing. 

(3) Maybe they believed newspapers would need Ecopsychology writers. Schools were happy to sell degrees in anything young people wanted. The Soviet Union collapsed after the unlimited student loan change and we soon saw what a devalued education looked like; a lot of Ph.D.s from Russian satellites were driving cabs in America. I am not writing any books on policy now but the last time I did there were American 5,000 Ph.D.s working as janitors and an order of magnitude more working as waiters. 

(4) Unless, as they hope, a Democrat gets elected again in 2028 and undoes all of it.

(5) Perhaps not. Despite complaints by a few science academics, journals have lobbied Democrats to block out increased open access for taxpayer-funded research. When President Obama got into office, they tried to get him to undo the Bush mandate for NIH studies but he did not. Yet he also did not increase open access. So nearly two decades later you fund science research and then a corporation owns the copyright on it and forces you to pay to read it. Congress is dominated by lawyers so they may pass a law mandating that anything important does not count unless a human lawyer signs it.