Out of curiosity, how are federal student loans rigged in favor of the borrower? Asking for a friend.
[edit: added "contingently" above. Some education programs have been found to be scams yet could be paid for with debt. I generally stand by the value of higher education and have found it to be a net benefit in my own life. The value has been strained as costs have shifted and the social contract is rearranged behind the backs of educators at all levels]
Even in non-scam programs, there's sometimes a massive amount of unknowable hazard on the path to a degree. And whether or not the degree is attained, the debt is still due.
In terms of hazard, I don't mean grades. Assume perfect grades. Especially in graduate programs, interpersonal politics can permanently wreck students who then have no effective recourse.
Examples and intricacies of what I'm trying to imply, aside, consider that education is a unique product that costs a lot of money but, in the process of attaining the product, you aren't treated as a customer but as if your position is precarious. Grades aside. Whatever specifics you might imagine, as they would vary, assume that the system is set up to protect the school that is collecting money. Not the person paying it.
Coming back around to my ultimate point about loan terms and risk.
Colleges, let alone Universities, used to be much fewer in number.
It used to be more widely known that the better Colleges, that is mostly the Ivy League and the top Liberal Arts colleges, were the only educational institutions that mattered in terms of imparting the vaguer yet more elite type of education of which you are likely thinking.
That is, the institutions who reliably facilitate the fuzzy process of becoming an educated person who can think like one. In the elite sense of these things.
What we've lost to an extent, in the multi-decade long taxpayer funded college degree bonanza, is that it is these elite institutions which are still seen as the only colleges that matter in the sense that I think that you are implying.
Other colleges are not truly valuable in this sense. So what are they good for? They are good for work training and certification pathways.
Universities have no problem charging obscene rates, which is hard cash, for something that they too would like to be only distastefully associated with money when debating the merits.
If it isn't translatable to money, then make it cheaper. Or keep the value firm and high, but also let's talk about what is being sold.
I mean there is a HUGE spectrum here. And this means that there are many educations paid for with debt that are utterly useless (and therefore valueless) on both of these metrics. In other cases where an investment failed to this extent, you can declare bankruptcy. But not student loans! No no no. Those are forever. Hardly a favorable condition for the borrower.
The real issue isn't the loan, but the entire system. The colleges have really jacked up the price of a degree. That's the real source of the problem. The interest rates are much closer to the market rates for capital.
1. A relatively low rate for no collateral. It's never the 2.x% we got on mortgages during the brief window when mortgage rates are good, but compared to other rates you get showing up at a bank with no collateral, they're amazing.
2. Almost guaranteed approval for the above. Can you imagine an 18 year old walking into a bank with no credit history and collateral and walking out with a loan for hundreds of thousands of dollars? Sure, it may be a terrible idea, but a student loan is one of the easiest to get.
In the 80s-90s in my country, we imported us-style loans, 'revolving credit', that were later called 'credits revolvers' because once you've taken one, a revolver was the only way out (not a joke, I know of 3 people who died in my village from this). We had to allow personal bankruptcy, and once the law was implemented and used, interest rates on those kind of loans doubled, and now they don't exist (although klarna and co are trying).