Why would the most secure debt have such a high interest rate? (Treasuries at the time were 2-3%)
> is already jacked
If you're arguing why it's not the same rate as treasuries, I'm not sure what more I can say. There's more that goes onto pricing loans than just the risk premium. It's a part of it, but not the whole story ("why are government-backed MBSes not the same interest rate as treasuries?").
Furthermore, just look around: you sure there's no "risk" with these loans? You cannot in honesty argue otherwise.
When I took out student loans in 2013, I got a 6.5% rate for 25 years. It can’t be discharged and any default is guaranteed by US Department of Ed (eg, I die, or use income based repayment for 25 years and discharge the balance). So to the borrower, the “risk” is that the USG defaults.
For comparison, I bought a house that year and got a 4.25% 30-year mortgage that has my house as collateral.
Why would a student loan that can’t be discharged have a higher rate than a mortgage?