You can't compare student loans to car/housing loans. If I only make $50k/yr, there is no bank on the planet that will give me a loan for a $300k ferrari. If I

You can't compare student loans to car/housing loans. If I only make $50k/yr, there is no bank on the planet that will give me a loan for a $300k ferrari. If I make a poor economic decisions, and choose to buy a ferrari, I'd also have to a find a bank willing to support my poor economic decisions. Naturally any bank will not take me seriously how much I plead with them on my ability to pay them back. That changes if I the bank is guaranteed by the government to get their money bank. How much would a Toyota Corolla cost if the government was willing to fully back any car loan? Why wouldn't Toyota charge $500,000 for a Corolla if banks didn't care if their borrowers couldn't pay that amount back? The short of it is people who would normally be completely priced out of a college education are now enabled by banks who give them fiscally irresponsible loans because they know the government is guaranteed to pay them back, whether or not the borrower can pay or not. If these loans didn't exist, there would be fewer people willing to pay $50k and schools would be forced to lower prices or go defunct.