This is my biggest concern - I see the motivation behind the law of "lets make sure banks give loans to a lot of people if it's for education so they can do it"

This is my biggest concern - I see the motivation behind the law of "lets make sure banks give loans to a lot of people if it's for education so they can do it", but we don't need to also remove the risk for them in giving those loans. For example you could have a law saying banks need to accept 20% of applications regardless and then accept whatever losses there may be. This might make a law that puts a lot of banks out of business, but it accomplishes the same goal without putting all the risk on the individuals