If you think that, I think you didn't read both of my posts carefully enough. First I argued that the government was making bad loans. The respondent replied t

If you think that, I think you didn't read both of my posts carefully enough. First I argued that the government was making bad loans. The respondent replied that they were making profit (implying they were good loans.) Then I noted that that doesn't necessarily mean the government made the most profit possible with the loans - I didn't say that was definite, just possible. And then I showed how political pressure is mounting for even this meagre profit to be slashed to cost price. Because that's the great thing about borrowing from the government. If enough people do it, you can bank on political pressure to hamstring any honest attempt to get a market return. So you wind up with a distorted allocation of capital to this market (student loans.) PS. If anyone remembers, this is exact same mistake which drove the 2008 recession - the American government's junk home loan program. Exact same high ideals - help people get into homes! - exact same result - people went for bigger homes than they would have otherwise - savvy hedge fund managers smelled the free money and pounced. And we all know how that turned out. PPS. If you're interested, check out: http://mises.org/books/economics_in_one_lesson_hazlitt.pdf http://mises.org/books/economics_in_one_lesson_hazlitt.pdf (pages 25-32).