Zohran Mamdani’s mayoral win in New York City was a warning of what could lie ahead in American electoral politics—especially the enthusiasm that he inspired among younger voters. Those aged 18–29 had the highest turnout of any group, at 35 percent, almost double its level in 2021. Mamdani’s democratic socialist agenda also draws support beyond New York. An Axios/Generation Lab poll conducted days before the mayoral election found that 67 percent of college students held a positive or neutral view of socialism; only 40 percent said the same about capitalism.
Support for socialism and for figures like Mamdani primarily comes from young people who feel priced out of the American dream—owning a home, securing a stable job, and starting a family. Many first confront the gap between expectation and reality when they enter college and take on substantial debt, a stark contrast with the youthful freedom that older Americans often associate with their own college years.
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On college affordability, Democrats have built brand trust: voters expect subsidies from them. The issue is salient enough that even local politicians like Mamdani, who have relatively little jurisdiction over higher-education policy, feel compelled to voice broad commitments to boosting university subsidies.
Republicans, by contrast, offer a muddled message. The culture wars of the past decade have made it hard for Republican politicians to run credibly on making college more accessible for mostly progressive students who are not their core constituents. Populist-leaning Republicans blame the affordability crisis on exploitative elite universities, and target them with punitive endowment taxes. Others, in a more direct appeal to student borrowers, have proposed cutting interest rates on federal loans. Both approaches would likely push costs higher in the long run: colleges can pass the endowment tax on to students through higher tuition, and lower interest rates tend to encourage more borrowing and give colleges room to raise prices.
Some Republican reforms, however, could improve affordability. The Trump administration’s recent targeted caps on graduate-school borrowing would pressure certain programs to reduce prices to maintain enrollment. Still, the overall GOP approach remains incremental, with effects that play out over time, in contrast to the immediate stimulus offered by Democratic-backed subsidies.
Both parties are missing the chance to offer reforms that would truly bring prices down and give younger voters hope. Start with some basic facts. Many flawed policy ideas gain traction because of misconceptions about both college prices and student debt. In recent years, the net cost of college has fallen modestly but remains far too high, compared with previous decades. The average cost of an undergraduate education has more than doubled since 1985—and yes, those numbers are inflation-adjusted.
Explanations abound. Higher-education leaders often cite state disinvestment, but they overstate how much lost state funding can account for higher prices. My analysis of 26 public universities between 1980 and 2018, for example, found that tuition revenue growth was three times the reduction in state funding—meaning that the loss of state support is insufficient to explain the surge in tuition.
Another popular explanation is administrative bloat. As colleges shifted toward a consumer rather than an academic model, they expanded their bureaucracies to meet student expectations. Definitions of “administrator” vary: some count only deans and presidents, while others include a wider array of nonacademic leaders and staff. Administrative density roughly doubled from 1990 to 2012, and administrative spending per student rose about 60 percent in real terms from the early 1990s to the mid-2000s—outpacing growth in instructional spending. But if anything, administrative spending is more likely a consequence of higher tuition than a cause of it. Colleges hire more administrators because increased tuition revenue gives them the means to do so. And even if they trimmed unnecessary administrative roles, most institutions would have little incentive to lower tuition now that they know the market will bear current prices.
That brings us to the Bennett Hypothesis, named after Ronald Reagan’s second education secretary, William Bennett, who argued that federal subsidies incentivize colleges to raise prices. Early research in the 1990s and 2000s showed mixed results, but later work has found stronger evidence for the theory. A 2017 New York Federal Reserve study suggested that for every dollar a college received in student loans and Pell grants, it increased tuition by 58 cents and 38 cents, respectively.
Identifying the causes of tuition growth matters because it shapes the policy response. If a major factor is federal subsidies, then reforming them should be a priority. Understanding what drives up costs can help explain why student debt has swelled and how it affects some borrowers more than others.
“Tightening loan eligibility at the margins would likely reduce the college-going population, easing demand and putting downward pressure on prices.”
Today, student debt has hit $1.65 trillion, held by 43 million borrowers. The median borrower owes $20,000–$25,000. The median debt is lower than the average debt because 8.4 percent of borrowers who attend graduate school owe more than $100,000. It takes borrowers 20 years, on average, to repay their debts.
A common misconception is that borrowers with six-figure debts struggle the most. The data suggest the opposite. Those with the highest balances often attend medical school, law school, or other professional programs, and they have the lowest default risk. By contrast, borrowers with smaller debt are likelier to struggle with repayments. They often attend for-profit or open-access public colleges and drop out, failing to reap the vocational benefits that a college degree can provide.
This distinction—who struggles and why—is crucial. The case for debt forgiveness rests on the claim that it would help many struggling young people, and it has been a staple of the Democratic platform for years. But broad-based debt forgiveness is regressive, benefiting the relatively well-off far more than those truly in need.
Loan forgiveness lost momentum after the Supreme Court blocked the Biden administration’s mass cancellation plan in 2023. Supporters have since shifted to reducing and eliminating interest rates on federal loans, which even some Republicans have entertained. But slashing interest rates is simply another form of debt forgiveness. Lending is costly for any institution, including the government, so lowering rates means that Washington can’t recoup its full lending costs in real terms, even when students pay back the full loan amount. And the same regressivity problem applies: borrowers with the largest loan balances benefit the most from interest-rate reductions, and they’re also the borrowers most likely to have high incomes.
It also matters that the borrowers most prone to struggle don’t attend the elite institutions. Elite universities have plenty of problems, but the economic benefits they offer their working- and middle-class students are not among them. Attacking elite endowments doesn’t address affordability at the broader set of universities where most students enroll, and it doesn’t help the schools whose students struggle most with repayment.
Most young voters are not drowning in unmanageable six-figure debt, despite the impression sometimes created by media and activist groups. Their concern—well-founded—is that college has become an increasingly expensive pathway to success. Older voters who tell students to “just be responsible” are right when debt results from borrowers’ own decisions, such as missing payments or choosing fields with low returns. But they are off-base when they dismiss the broader complaint that college itself has become dramatically more expensive. “Working harder” cannot undo tuition that outpaces inflation.
The deeper problem in higher education, often overlooked, is that too many people who aren’t ready for college attend anyway. Universities are admitting students who struggle with middle-school math. The dropout data underscore this point: students often describe leaving school in financial terms because that is the pressure they feel most immediately, but the strongest predictors of dropping out are inadequate academic preparation and poor early college performance. If the system draws unprepared students into expensive programs that they are unlikely to complete, then policies focused solely on easing repayment or subsidizing access will not address the root problem.
Addressing college affordability requires both policy and messaging solutions, along with steps that individuals can take on their own. Policy can reset the incentives that guide people and institutions and encourage them to make better choices, but individuals can also navigate the system more constructively and position themselves for financial success.
Democrats and Republicans tend to make the same strategic error: they focus on reducing student debt rather than the price of college. The result is a policy menu dominated by debt forgiveness, lower or eliminated interest on federal loans, tweaks to income-driven repayment plans for low-income borrowers, and expanded Pell Grant eligibility for workforce programs. None of these measures meaningfully reduces demand for costly degrees.
We need to flip the script and offer a distinct vision of affordability—one centered on reducing demand for college and expanding viable alternatives.
It’s worth remembering that many college degrees provide positive returns on investment. Students run into trouble when they enroll in schools or programs that don’t. That’s why federal funds should be disbursed more strategically. Banks don’t lend to people they doubt can repay a loan; similarly, federal student loans should take into account whether a student is likely to succeed in college-level work, using indicators such as academic records, standardized test scores, and the program a student intends to pursue. Students should be encouraged to enter in-demand fields, but academic readiness matters, too: a student may aim for a lucrative major, yet weak preparation makes it far more likely that he will drop out or shift into an easier track.
Tightening loan eligibility at the margins would likely reduce the college-going population, easing demand and putting downward pressure on prices. Paired with stronger workforce-training and credential programs, such a system could help steer students into the pathways best suited to their abilities and goals.
Messaging matters, too. Young voters should hear a clear distinction: price is a public-policy responsibility, but debt is your responsibility. We should not dismiss the fact that students voluntarily take out loans, but lecturing them about what college used to cost—or telling them just to work harder—misses the point and breeds resentment. What they need to hear is that today’s price tags are not their fault but are the predictable result of a system distorted by government subsidies without adequate guardrails, allowing universities to raise prices without real market discipline. Voters must understand that the college affordability crisis was engineered by perverse incentives and that free-market reforms can help restore sanity to the system.
Students didn’t cause rising college prices. Still, hard choices are necessary. In interviews with recent graduates, a pattern emerged: families often acted out of fear—fear of missing a prestigious program or the elusive “college experience.” Yet those anxieties can lead to needlessly costly decisions. Families should look first at colleges that meet 100 percent of demonstrated financial need. In-state public universities are usually far cheaper than out-of-state alternatives. And many students can begin at community colleges, which often provide more individualized academic support than four-year schools. These are only a few examples, but the broader point stands: students have more practical, affordable pathways than they sometimes realize.
This article is part of “An Affordability Agenda,” a symposium that appears in City Journal’s Winter 2026 issue.
Photo: A Federal Reserve study estimated that for every dollar a college received in student loans and federal grants, it increased tuition by 58 cents and 38 cents, respectively. (Rob Crandall/Alamy Stock Photo)
