To my understanding, the problem is that when the lenders WERE calling colleges, it wasn't to say "this kid wants to borrow 100k in loans", it was to say "here'

To my understanding, the problem is that when the lenders WERE calling colleges, it wasn't to say "this kid wants to borrow 100k in loans", it was to say "here's 50k in goodies, send your students to us for loans!". Hence the controversies over kickbacks and the like.