For as long as we can remember, Republicans and Democrats have been talking past one another when it comes to federal student loan policy. Both sides of the aisle want students from all backgrounds to have access to a valuable and high quality education, but where progressives prioritize federal support, conservatives call for reining in federal programs.

As the Biden administration steams ahead with various loan forgiveness efforts, the federal student loan program becomes more and more unprofitable, deepening divisions between Republicans and Democrats. What was once a loan program is being transformed into an entitlement program—not through Congressional assent, but because of repeated abuses of executive power. Conservatives are understandably infuriated by this shift, especially because the program was built to be revenue positive, not a hand-out. That said, progressives also have reason to be worried.

The further we subsidize colleges and universities through federal student lending without adequate accountability for program outcomes, the more we encourage colleges to raise their costs and build new programs of dubious value. This is especially true when it comes to federal graduate lending, which unlike undergraduate lending, is unlimited: Taxpayers foot the bill for whatever a college’s asking price may be. As Biden doubles down on forgiveness, the message being sent to colleges is not “decrease your prices.” It is, instead, “increase your prices and build new programs so that you can reap more federal dollars.” Student outcomes are lost in translation. 

Earlier this month, the Foundation for Research on Equal Opportunity’s (FREOPP) Preston Cooper and Beth hosted a webinar to discuss a recent report the three of us co-authored on the potential for expanding the role of the private sector in student lending to combat some of the trends outlined above. Bob Shireman, a senior fellow at The Century Foundation who previously worked on higher education for the Clinton and Obama administrations; Katherine Knott, a higher education reporter at Inside Higher Ed; and Ken Ruggiero, the founder and CEO of Ascent Funding, a private student lender, joined the discussion. Despite various disagreements, there was surprising common ground. 

Shireman, by no means a conservative, agreed with us that profligate lending—especially graduate lending—serves as a backdoor subsidy for many programs of questionable value. In fact, in a recent report co-authored with Beth alongside left-of-center scholars at The Century Foundation and Education Counsel, we endorsed the notion that federal graduate lending should, at the least, be capped like undergraduate lending. This convergence was happily bewildering: Progressives agreeing with conservatives on federal higher education policy is not a sight you see every day, especially these days. 

While Shireman and progressives are wont to keep much more of the federal student loan program intact than we and many conservatives are, what these developments suggest is that federal lending without regard for student outcomes is becoming more unpopular by the day. If, in the next few years, the political debates over federal student lending are centered around how to properly regulate an expanded student loan market—even if just for graduate lending—and to what extent federal lending should be capped, conservatives should consider that a win, however incremental a step forward it is.