Biden administration will 'look into' and 'crack down' on colleges raising tuition after student loan handout

The Department of Education will “look into” and “crack down” on colleges who use President Biden’s student loan handout to raise tuition costs, the White House Press Secretary Karine Jean-Pierre said during a press conference on Wednesday.

Jean-Pierre was responding to a reporter’s question regarding if the Department of Education is concerned colleges will raise tuition rates after the student loan handout is given.

“This is something that the Department of Education is going to look into in particular with when you talk about colleges potentially raising prices, that’s something that the Department of Education is looking at and is going to crack down on that,” Jean-Pierre said.

The reporter then pressed Jean-Pierre, and said that it seems like the administration is “preparing for” colleges to increase tuition costs.


“Well, I mean, look, this is, again, this is something that the Department of Education is aware of. This is something that we’re monitoring, but it doesn’t take away from what this means, from what the president announced today,” Jean-Pierre responded.

White House Domestic Policy Adviser Susan Rice said that colleges should use funding from the American Rescue Plan to make sure that tuition isn’t increased beyond the rate of inflation.

Rice added that the Department of Education will publish an annual list of institutions that are the “worst actors” in terms of “what they promise, what they charge, and what they deliver,” and said the department will be “vigilant.”

Brian Riedl, a senior fellow in budget, tax and economic policy at the Manhattan Institute told FOX Business that he expects the handout to cause a spike in tuition costs.


“Students will likely feel liberated to borrow more money on the resumption of future loan forgiveness, and universities will take advantage of the additional borrowing by raising tuition,” Riedl said. “This is pretty similar to the fact that historically 60% of all student aid increases have been captured with tuition hikes, and this will be treated like an increase in student aid moving forward, which suggests that 60% will be countered by tuition hikes.”

Biden announced on Wednesday that the handout would eliminate $10,000 of federal student loan debt for certain borrowers who make under $125,000 per year, and Pell Grant recipients may receive handouts of up to $20,000.

Under the handout plan, the Biden administration paused student loan payments for a final time until December 31, 2022, and payments are set to resume in January 2023.

Student loan payments have been suspended since the COVID-19 pandemic began in 2020.

Fox News’ Jessica Chasmar contributed to this report.

Source: Politics

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