Trump to colleges: Cut costs, or lose taxpayer cash

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Republican presidential nominee Donald Trump made a daring policy proposal Thursday night, saying that as president he would pressure schools to lower tuition costs by threatening to revoke their access to federal funds if they refuse.

Trump made the announcement while campaigning in Chester Township, Pa., a suburb of Philadelphia, while discussing the steadily rising cost of college.

“If universities want access to all of these federal tax breaks and tax dollars paid for by you,” Trump said, “they have to make good faith efforts to reduce the cost of college.”

Trump didn’t offer any details on how his suggestion would work, but almost any form of implementation would cause a dramatic shake-up in college education. The vast majority of U.S. colleges are heavily dependent on the federal government because the federal government controls the student loan industry and because the federal government controls billions of dollars in academic grants to colleges.

Only a handful of schools, such as Hillsdale College in Michigan, operate entirely without federal support.

Schools could also be driven to lower costs by being threatened with a loss of non-profit status, forcing them to pay millions of dollars in extra taxes.

Republican Rep. Tom Reed proposes just such a course of action, introducing a bill in January in the House of Representatives that would strip wealthier colleges of non-profit status if they don’t spend a sufficient portion of their endowment each year.

The idea is also potentially more far-reaching than a policy proposed by Democratic nominee Hillary Clinton. Clinton has pitched a plan to make public colleges entirely free for families making less than $125,000, but Trump’s proposal could potentially influence private schools as well. Furthermore, by compelling schools to cut costs rather than simply having them covered by the government, Trump’s proposal could compel colleges to substantially alter their spending practices.

Americans currently hold a whopping $1.2 trillion in student loan debt. It is the largest source of debt in the United States other than home mortgage debt.

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