It's pretty much universally accepted at this point that the flood of government student loan money has both distorted the higher education market, and created a trap for millions of people who have gotten an ineffective education with that "free" money.
Your analogy to mortgages is right on, but you've drawn the wrong conclusions. Fed-backed mortgages absolutely functioned as free money. Because the risk of unqualified borrowers was assumed by the government and by opaque, byzantine, and corrupt securitization schemes, banks were incentivized to hand over money to people who weren't able to pay it back.
This was, in every sense that matters, "free money". And it led directly to a financial crisis that many millions of people have never fully recovered from.