We’ve often said that the student loan program is like a dog chasing its tail, because the more financial aid amounts are raised, the more schools hike their tuition.

Now, we have concrete evidence.

Before the Big Beautiful Bill, there was no cap on federal graduate school loans. In recent years, there has been a wide variety of ways to convert these loans into grants, dumping the full cost on taxpayers. So colleges continuously raised tuition treating it like free money. Well, not anymore.

Santa Clara just slashed their tuition by 20% to $50,000, to match the student loan cap.

The PLEDGE Scholarship will be awarded as a renewable, guaranteed $16,000 tuition scholarship to every full-time student in next year’s incoming class, and $12,500 to those in the school’s Flex J.D. program. The PLEDGE Scholarship was designed to ensure that next year’s incoming class has access to the funds they need to cover the cost of tuition for Santa Clara Law despite new federal loan limits.