Comment by lotsofpulp

The reason for the federal guarantees was because voters wanted lower taxes, or otherwise did not want to redistribute wealth to students.

It’s a common way to scam today’s young and future taxpayers. See also underfunded pensions and other post employment benefits for government employees and taxpayer guaranteed 30 year fixed rate mortgages with no prepayment penalty.

Instead of helping someone, society lends them money and lets future taxpayers deal with the mess. That is how you win elections in aging societies.