Also compare to some European countries, like the Czech Republic, where all the top universities are free of charge.

Training for a trade job is free of charge, too.

(Paid by the government.)

I got my education there and later joined a Silicon Valley company as an engineer.

Just cause of collateral. You can impound a car, foreclose on a mortgage, sell it and get back much or most of your money, which is why rates can be a lot lower. You can't compound on a college dropouts partial knowledge. And given there are various ways to get the loan forgiven, and with college dropout rates being as high as they are, and given the (popularity and) volume of degrees with low financial returns...

Fact is, most studies show that the returns on education in the US are quite high, higher than much of the rest of the world.

Where I am from (EU), you're not dissuaded to pursue a degree with low financial returns. My college fees are 10k in total for the entire bachelor+master's programme, and you can borrow 50k during those 4 years currently at 0% interest. I love it, but our returns on education are quite a bit lower than in the US because we subsidise things that don't work, or prevent it from failing, and incentivise people to study things they don't need or have no economic value. And it doesn't necessarily make the country better off.

I'm not saying economic value is the only metric that counts, there are other reasons why I'm in favour of pretty strong educational subsidies. But there's also benefits to the US system too that we don't have. And it's too easy to say the US is intentionally ruining the next generation, that's just not true.

>Just cause of collateral. You can impound a car, foreclose on a mortgage, sell it and get back much or most of your money, which is why rates can be a lot lower.

If it follows that the interest should be higher on a more risky investment, then why are student loans (that are unforgivable) not essentially free? As they should be basically a zero risk investment since they follow the person around forever, through bankruptcies etc.

Unforgiveable doesn't mean it'll be paid back. If someone goes bankrupt and can't forgive a loan, it's more likely that they'll continue to miss interest payments while also never paying back the principal, which just keeps building up. Typically loans line that get written off internally as a loss, or sold at a loss to a debt collector, even if the loan isn't forgiven to the borrower, it'll be a loss and therefore a risk event for the lender.

i understand the loan part, i don't understand why they have an interest rate to begin with. aren't these loans guaranteed by the government anyway?