Higher education has dominated the headlines this year. From drastic funding cuts to threats of deaccreditation at some of America’s most prestigious universities, the status quo of higher ed is being disrupted by the federal government—sparking reactions left, right, and center. Some of these actions may seem unprecedented and even reckless. But they raise a deeper question as to the efficiency of federal government involvement in higher education.
Historically, education has been a very localized reality. From private tutors to state universities, it has been recognized that those closest to students can best account for their academic needs. Because there is no mention of education in the U.S. Constitution, it was widely assumed that responsibility of education was reserved to individuals and the states.
With the exception of land-grants and some vocational schools, the federal government maintained very limited involvement in higher education until the mid-20th century. That began to change after World War II with the passage of the GI Bill, which expanded college access by funding tuition for veterans. The government also began providing research funding for pursuits related to the Space Race—namely, math, science, and language programs. In doing so, the federal government framed its involvement in higher ed as a matter of national defense and thus an appropriate reason for federal involvement.
Over time, these programs ballooned into what we have today. In Fiscal Year 2023 nearly $60 billion was spent on research and development grants and contracts and over $30 billion was spent on Pell Grants. Yet despite billions in federal aid, students are taking on massive debt. The average borrower carries a balance of $38,375—part of a total of $1.693 trillion in student loan debt held by 42.7 million student borrowers as of 2025. Notably, federal student loan debt accounts for 92.2% of all student loan debt.
One must wonder whether these loans pay off for students. According to a recent report from the Strada Institute, a college degree is not a guarantee of success in the marketplace. In fact, only about half of college graduates secure a “college-level job” within one year of graduating. Even within ten years of graduation around 45% of graduates are still “underemployed”—a reality that makes paying off hefty student loans all the more difficult.
These numbers raise serious questions about the effectiveness of government involvement in higher education. Though some may argue that government grants have genuinely helped aid those with financial needs, others raise concerns that the Department of Education and other federal involvement have drastically increased the cost of an undergraduate degree in the U.S.
For example, using constant dollars (i.e. numbers that account for inflation), between 1963 and 1980 the average tuition for a four-year degree in the U.S actually decreased from $11,411 to $10,097. However, since 1980 tuition has increased rapidly from $10,097 to $27,673 in 2022. That’s a nearly 175% spike in the cost to attend college. Perhaps not so coincidentally, 1980—the inflection point in this trend—was the same year that the Department of Education was founded. And despite increased federal funding, this same period has seen large increases in the amount of student debt taken on by students. Since 1995, federal student debt has increased by over 800%.
This trend suggests that federal involvement in higher education isn’t paying off for too many American students. While subsidizing college in the short-term seems like a great idea, the statistics say otherwise. For the federal government—or state governments for that matter—to push as many people as possible into a four-year degree program leaves the students saddled with debt. It also leads to underemployment for those with degrees. In turn, graduates are more likely to delay getting married, having children, buying a home, and starting a business.
These funding programs are certainly well-intentioned. In fact, many federally funded research programs have helped to advance science and technology. Nevertheless, the inefficiencies associated with federal involvement in students’ tuition raises serious concerns. In seeking to advance education, these programs appear to have instead merely inflated degree costs, driven up debt, and flooded the job market with degrees of ever-dimishing value—such as the proliferation of hyper-niche degrees like the LGBTQ+ Studies minor at the University of Louisville (U of L) and the Gender and Women’s Studies majors offered at U of L, UK, and WKU. This trend calls into question whether the federal government’s continued involvement in higher education is doing more harm than good.
Many young people seem to be picking up on this. Fewer are choosing to pursue a four-year degree. And among those who do, only 39% are young men—down from 47% in 2011. One of the most common reasons cited for this drop off among both young men and women was cost—a problem that federal aid was supposed to solve, but in many ways has only made worse.
Rather than doubling down on a failing system, higher education might benefit from rethinking long-standing assumptions about federal involvement in academia. A growing number of colleges—including institutions like Hillsdale, Grove City, and even Kentucky’s own Boyce College—have chosen to forgo federal funding entirely. Their model shows that it is possible for institutions of higher learning not merely to survive, but even to thrive without government funding. Such examples suggest that meaningful educational reform may not begin in Washington, but rather by stepping away from it.