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The demand is artificially inflated by the ready availability of loan money.

Many loans cannot legally be denied. This removes what otherwise would be a barrier to frivolous spending.

And, on the flip side, the loans cannot be discharged through bankruptcy. Therefore, there's a huge incentive on the lender's part to make such a loan. (Similar to NINJA loans and liar loans in the mortgage banking crisis of a few years ago.)

Well, the most you can take out is $5,500 as an 18 year old. They're more than happy to legally deny you any other loans if you don't have the support of a rich family to cosign some private ones for you.

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