As the other commenter mentioned, most student loans are guaranteed by the federal government, meaning that the bank is compensated without taking any risk. Stu

As the other commenter mentioned, most student loans are guaranteed by the federal government, meaning that the bank is compensated without taking any risk. Student loans in particular are insidious because non-payment can result in one's wages and social security being garned, and it's one of the few loans that doesn't go away in bankruptcy. Regarding mortgages, auto loans, business loans, the key point is that the money is created out of thin air. 80% of bank credit goes to mortgages, which ultimately drives up prices and fuels housing bubbles. The Great Recession and Great Depression were caused by the finance sector. The Great Recession was the result of banks fueling a housing bubble by loosening lending standards, driven by the peddling of risky financial securities like CDOs, and leveraged to the tilt by derivatives like credit default swaps. When it all collapsed, they had to be bailed out (while Main St never got one). The Great Depression was preceded by a stock market bubble fueled by speculators trading on margin. The banking industry does not create wealth. It is a middleman with the monopoly privilege of creating money out of thin air in exchange for dishing out collateral-backed loans of this funny money, and has 1. too much power, and is 2. overcompensated for it's "work" 3. in the long-term will reduce our competitiveness and lead to our relative demise (eg. look at General Electric). You're failing to envision an alternative where credit is more democratically allocated, where finance isn't so overcompensated and such a brain drain attracting our brightest minds, and where the government can offer $350b in small business loans during a crisis without some middlemen taking a ludicrous 3% fee for shuffling some papers.