Key Points

• The Trump administration offers an opportunity for meaningful and overdue reform of higher education following a period of halted progress during the Biden administration.
• Colleges should be delivering an economic return on investment for students in every program—and for taxpayers. Colleges that don’t meet that standard should lose access to funding through the federal student aid programs.
• On student loans, the Trump administration should be focused largely on streamlining and reining in the generosity of student loan safety nets. It should also seek to ensure that borrowers who are truly struggling get the help they need without an excessive administrative burden.
• The federal lending program and the accountability regime for higher education institutions are the wrong tools for addressing inequity. Unintended consequences of higher standards for students and borrowers should be addressed through direct grant aid rather than lower standards.

Introduction

The year 2019 marked a dramatic turning point in the national discourse on higher education policy. On April 22, 2019, Senator Elizabeth Warren, vying for the Democratic nomination for president, announced that as president she’d cancel up to $50,000 of student debt for 42 million Americans.¹ She started a chain reaction, with each serious contender in that primary race announcing their own policy to cancel student debt, reassigning the burden to the taxpayers—who had financed the initial expenditure. From that point forward, and perhaps to a greater extent following Joe Biden’s announcement in the run-up to the 2022 midterm elections that he’d fulfill his campaign promise, the discourse changed dramatically on both sides of the aisle.

Democrats—who had previously been at the table for thoughtful, bipartisan talks on reforming higher education to better serve students and taxpayers—seemed to shift their sights to loan cancellation and a new, more progressive regime altogether. Accountability, for example, had historically been an area of concern among Democrats. But interest in using accountability to address fundamental changes in higher education dropped precipitously as attention turned to loan cancellation.

When the Democratic Party first embraced the idea of canceling student loans, it was then–presidential candidate Biden who seemed most skeptical of the direction his party was taking on this issue. Among the candidates, his plan to cancel student debt was the most restrained. His comments in one public forum early in his presidency, a town hall conversation with voters for CNN, indicated that he was leery of student loan forgiveness benefiting many already privileged Americans.² I wondered whether his skepticism about the issue would cause his campaign promise to go unfulfilled, but as the midterm elections approached, President Biden took the bold step of advancing his plan, which had become more generous than he had promised during his campaign.

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