The old adage “what goes up must come down” hasn’t often applied to higher education. That may be changing.
This month, UC Irvine’s Paul Merage School of Business announced a significant cost reduction. Starting in the fall, the program fee for its Flex MBA will drop by $30,000 and the cost of its Executive MBA will decrease by $48,000.
While many businesses cut prices to stay competitive, tuition reductions have been a rarity in higher education. For the 1975-76 school year, the average tuition of a private college was under $2,300, according to the Education Data Initiative. Adjusted for inflation, that would be around $13,400 today. But for the 2025-26 school year, average tuition for a private college had shot up to almost $40,000. In 2020, the average cost of an MBA was around $60,000. But the cost of top programs, including at the Wharton School, Stanford and Harvard, has surpassed $150,000.
These ever-increasing prices have long frustrated students and policymakers. Today, more than 42 million borrowers owe more than $1.8 trillion in student loans. For 2025, the outstanding debt for graduate student borrowers was projected to be more than $100,000. That’s a big financial burden to carry into a first job, even if it comes with a higher paycheck. People used to be able to buy houses for less than that.
This is why the Trump administration and congressional Republicans included new limits on student loans in last year’s Working Families Tax Cut Act, previously known as the One Big Beautiful Bill. Based on that bill, the Department of Education recently issued new regulations limiting the amount of student loans. They included a $100,000 aggregate cap on graduate student loans.
What UC Irvine did is proof that even institutions of higher education respond to incentives.
“At $99,000, the Flex MBA now falls below the federal loan cap for graduate business degrees, removing a key financial barrier for working professionals in Southern California and beyond,” the school said in a news release.
For decades, politicians have sought to make higher education affordable by allowing students and their parents to load up on student loans. This is strong evidence that it wasn’t just a mistake. It was counterproductive.
The massive influx of federal student loan money enabled schools to jack up prices. Not surprisingly, universities for years denied the connection and Democrats fought stricter lending limits and an adherence to more traditional underwriting standards as enemies of “equal opportunity.” The Trump tax bill is a step in the right direction, as UC Irvine’s move suggests.
Over the long run, the federal government should, for the most part, leave student loans to the private sector. But if you cap the amount of public money available, colleges will have an incentive to lower tuition, instead of raising it.
Well-paid college officials won’t like this plan, but it would make college and graduate schools more affordable.
