Two things you miss: 1/ Student loans are not dischargeable in bankrupty. 2/ Today, the government IS the lender. The government has created a system of ince

Two things you miss: 1/ Student loans are not dischargeable in bankrupty. 2/ Today, the government IS the lender. The government has created a system of incentives (even before the student loan industry was nationalized) that encourages lending large amounts of money to anybody by eliminating the risk on the part of student loan lenders. People can basically never get out of the debt, so you can lend arbitrary sums of money to Feminist Dance Theory majors and other sorts of poor-ROI nonsense. "Predatory loans" is a misnomer. Predatory government is far more accurate.