With the debt deal wrapped up, we’ve already seen cuts for graduate and professional students. But should there be more? Would shrinking the federal student loan program actually help make higher education cheaper? Here’s the argument for it, according to Thomas D. Parker, senior associate at the Washington, D.C.- based Institute for Higher Education Policy.

One thing Parker suggests? In his own words:

“A reduction in federal-loan availability might just encourage higher education to think a bit more seriously about reducing the rate of increase in their costs or developing more cost-efficient ways to deliver high-quality education.”

Why? Also in his own words:

“There has long been concern that one reason colleges can increase their prices at such a rapid rate is that students and their parents can borrow at favorable terms from the federal loan programs. In the case of PLUS, the government offers a program that will lend at good rates with minimal credit requirements for the entire cost of education, no matter what the colleges charge. It’s a deal that the car companies or any other industry reliant on consumer-credit financing would envy.”

But who eats the cost in the time between lower federal funding and a trickle-down effect that manifests in the form of a smaller tuition bill? Students. And beyond that, state funding to public institutions has seen widespread cuts across the country, accounting for at least a portion of the increases in tuition fees. So unless the government counters a cut in federal student loans with an increase in education funding, can we really expect a significant decrease in cost of attendance?

What do you think? Sound off on Facebook or in the comment section below and let us know if you think more cuts in federal student loans is a proper response to the spike in tuition fees.