Yes, some startups can get seed funding. If you have the right vision, product, market, team, and strategy. Assuming you know or can get introduced to the right

Yes, some startups can get seed funding. If you have the right vision, product, market, team, and strategy. Assuming you know or can get introduced to the right people with the necessary capital, that you’re willing (in most cases) to give those people some degree of control and direction over your company, that you are willing to give them preferred equity in your company which will be paid first (and before you) in an exit, and a host of other technical and legal rights. Assuming all that is true a startup can take money from investors, under a strict regulatory framework, such money which must be spent properly for the benefit of the company subject to oversight by the SEC, among others. In short, the ability of startups to raise money is highly regulated and highly specialized work. It’s a very different thing indeed from the essentially guaranteed issue funding which is available in the form of student loans. But all that aside, the central point is just this. If a bank is making an underwriting decision, then the bank is setting the interest rate and taking the risk. If the loan fails to pay back, well that’s why the bank diversifies. In the case of a federal student loan, there is no underwriting. There is no sliding scale interest rate - or if there is one it’s more likely to include subsidies for higher risk borrowers than an actual risk adjusted rate. In return for this, it becomes a sort of super-lien which can’t be discharged. This makes sense from a theoretical perspective and even from a policy perspective as long as a college education provides a strong ROI on average. The system breaks down when the ROI from attempting to get a degree is a wide distribution which includes a fat tail of people who see zero return on the most sizable investment they ever made or possibly will make. IMO the solution is 1) that the repayment should always be income based, and 2) the school should have to refund a significant portion of the loan IF the tax returns of the student over the next 10 years don’t support the repayment of the loan. 3) the student pays for 15 years post-graduation maximum.