In Wake Of College Cheating Scandal, Trump Admin May Make Colleges Help Pay Student Loan Debt

(Image: Wikimedia Commons)

The $25 million bribery and college cheating scandal has led to much debate about all aspects of the university acceptance rat race and higher education issues in general. Students of wealthy parents were granted admission because mom and dad shelled out sometimes as much as nearly half a million in bribes to make it happen. The tragedy is that many other students (some who no doubt have the actual test scores and extracurriculars to gain admittance on their own merit) can’t afford the Ivy League education unless they take out massive student loans to make it happen.


The burden of student loan debt — which topped out at $1.5 trillion in the U.S. in 2018 — has not gone unnoticed, blamed as one reason millennials are having a hard time outpacing their parents in terms of salary and why they remain living at home and on their parents’ health insurance so much longer than generations past. The theory is they start out their careers in extreme debt, putting them behind before they’re even out of the gate.

Now the Trump administration is proposing a fix that will put colleges and universities on the financial hook for failure of their students to repay student loan debt. It’s similar to a risk-sharing strategy that could mean some schools’ federal funding would be at stake if their students default on loans.

The White House is weighing a measure that would require colleges and universities to take a financial stake in their students’ ability to repay government loans, an effort that could squeeze loan availability to students and reduce defaults.

For several months, Trump administration officials have been discussing enacting such a mechanism or making a push for one in Congress as part of a broader effort to combat rising college costs.

In the administration’s budget proposal released Monday, officials made brief mention of a “request to create an educational finance system that requires postsecondary institutions that accept taxpayer funds to have skin in the game through a student loan risk-sharing program.”

Such a proposal could be included in a coming executive order addressing higher education, several officials said.


A draft of the order has not been finalized and there’s some debate as to whether or not it would come in the form of an executive order or if Congress would be asked to amend legislation like the Higher Education Act, up for a possible renegotiation this year.

Conservatives legislators are said to favor the idea because it forces a school to “prove their own worth,” the Wall Street Journal reports.

Proponents argue that, if schools were made responsible to partially or fully pay back that money, they would likely offer fewer low-quality programs or induce fewer students to attend who couldn’t ultimately pay.

Detractors say this could harm the admission numbers of quality students who need help affording tuition. In light of the college cheating scandal, where less than quality students were let in precisely because of their parents’ ability to pay, the debate about universities and colleges having skin in the financial game regarding student loan debt will likely ramp up.



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