> The .gov backs student loans. And, they are non-dischargeable. So, it is zero risk for the lender to give loan to the 2.7 GPA moron getting a worthless basket weaving degree from the local private lib arts school for $100k. So, they give as many loans as possible, since they can't lose (taxpayer on the hook).

The only lender who is allowed to issue government-backed student loans for many years is the federal government, and their policy on what loans they’ll issue and on what terms are set in law, not a response to market incentives.