The Fed guarantee is basically an enforced tax on the student’s earnings until the debt is repayed. Dischargeable only if dead or disabled. This is to make up for states cutting educational budgets for colleges and universities. It’s a progressive tax too where students at higher cost schools (that typically lead to higher incomes) pay more. It sucks for drop outs who can’t make enough to pay the bill but in those cases income dependent payment plans are supposed to help alleviate the pain. The Feds could regulate this by taking back money from schools whose graduates underperform or are whose programs are outright scams etc.. so the government subsidizing the loans is not the problem. The feds could even regulate tuition increases retroactively. It also exempts scholarships and the rich who are otherwise funded. So instead of a state or fed tax on the 1% to fund higher ed, you just guarantee payments from the students.