The $50,000 Lesson: How Cutting Student Loan Subsidies Finally Lowered Tuition

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When government stops fueling the college loan machine, prices fall — fast. Santa Clara Law just “slashed” tuition from $63,000 to $50,000 after new federal caps limited grad school borrowing. But instead of calling it a price cut, they’re spinning it as a “pledge scholarship.” In this episode of Watchdog on Wall Street, Chris Markowski exposes how decades of unlimited student loans inflated higher education costs — and how a simple change in policy proves the market still works when subsidies disappear.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
When you stop subsidizing something, the price drops. I had
to sent over to me. Santa Clara, one of the
first law schools to publish their twenty six twenty twenty
seven tuition. Now, historically graduate school loans grad plus loans

(00:42):
had no limits. We did a bunch on this talking
about the various different BS degrees that kids were going
out and taking massive loans on film. And then we
did that whole expose on Columbia and their film school
and the debt that we're in working hundreds of thousands

(01:03):
of dollars. Couldn't find a job anywhere. But anyway, starting
next year, professional school borrowing is capped at fifty thousand
dollars a year. Wow, So let's take a look. Let's
take a look at tuition at Santa Clara. Yeah, twenty

(01:26):
twenty five, twenty six, it was sixty three thousand, two
hundred and eighty dollars. It's fifty thousand. Now it's fifty thousand.
It's gone down. Now they're they're not they're not calling

(01:46):
it a price reduction. You know what they do. They're
calling it. I'm not making this up. They're calling it
a pledge scholarship. It's going to be offered to all
incoming first year students signing up for their Juris doctor programs.
The pledged scholarship will be awarded as a renewable guarantee

(02:08):
sixteen thousand dollars tuition scholarship to every full time student
next year's incoming class. You got to hand it to
them with their BS. Now, they're basically saying that, Well,
what they're read between the lines is they really can't
charge anymore than what the loan limit is. So what

(02:35):
would happen. What would happen if the loan limit was
thirty five forty thousand, Well, they might have to drop
their prices even further. Any time the less there's any
time you subsidize anything, the price is going up, Watchdog

(02:58):
and Wall Street dot Com