This is assuming that your payments are enough to beat the interest your loan accrues. Having large student loans could also discourage people from doing things

This is assuming that your payments are enough to beat the interest your loan accrues. Having large student loans could also discourage people from doing things such as buying homes or reinvesting that money into the economy. Effectively, every dime you put down towards interest on a federal loan is money that could've been spent towards things that benefit the market. If you were to take a pure free market approach, federal student loans are theoretically a Very Bad Thing and it should be in the government's interest to reduce those.