"Fixing the lending problem might influence the overspending, but fixing the overspending would solve the problem much more directly." You're missing the point

"Fixing the lending problem might influence the overspending, but fixing the overspending would solve the problem much more directly." You're missing the point. The overspending is a direct result of the lending problem. Lending is the root cause of the overspending problem. Students choose schools with lots of amenities because it's so easy to get loans, so why not? Because of this, schools have to continue to build plush dorms and state of the art fitness centers in order to keep their enrollment up. This, of course, drives up costs, which is passed on to students via tuition, who just continue to pay for it all with more readily available loans. A particular university can't just cut spending, because it would put them at a huge competitive disadvantage with everybody else. Only by reigning in lending will costs stabilize.