The Higher Education Act (HEA) of 1965 was meant to unlock the secret to upward economic mobility by granting more Americans the chance to obtain a college degree. Nonetheless, the originators failed to recognize how this dramatic shift in federal higher education policy would affect generations to come. Today the federal government originates or distributes roughly 89 percent of all student loans through its various loan programs. This near-monopoly has distorted tuition prices. As Congress considers reauthorization of the HEA, measures to curb federal spending and subsidies must be included in order to lower costs for students and unburden American taxpayers. [This report was prepared by the Heritage Institute's Center for Education Policy.]