I'm not following your comment, Federal student loans started in 1958 [1] but costs didn't start to skyrocket until the late-80s/90s. Since the late-80s costs have more than tripled at public universities after adjusting for inflation from about $3,000 to almost $10,000 [2].

==dump money into an industry while increasing demand==

Did the money create the demand or are you saying they dumped the money while also creating demand?

==not changing supply==

Do public universities have the same number of available seats as they did in 1958? 1980? 2000?

[1] https://en.wikipedia.org/wiki/Student_loans_in_the_United_St...

[2] https://www.cnbc.com/2017/11/29/how-much-college-tuition-has...