schools wouldn't have been able to raise tuition by insane amounts if the gov't hadn't underwrote all those loans' risk

Nah, that was an opportunity that universities saw to make more money and they took it without thinking of the larger consequences (which is where we are today having to do loan forgiveness). Nothing about government underwriting forced schools to charge higher tuition. They chose self-enrichment (not even profit to shareholders except for scam schools) over easier access to education and a more educated population. Universities should not be behaving like capitalists.

Yes universities took advantage, but it seems clear that the government is who is to blame. They created a situation where a person who is going to be making $40,000 a year could take out massive student loans. It is hard to put as much blame as you are on an organization who has the opportunity to get government money.

Universities could have said "yes, you can take out 40k in loans, but with our low tuition, you won't need to"

That would be leaving cash on the table.

There were consequences for taking that cash, as we see today with the need for loan forgiveness.

If universities had kept tuition low, you might still have had government backed loans, but would not have needed loan forgiveness.

I don't see how people can simultaneously be against government-backed loans existing, but also wanting universities to take as much from that system as possible to the detriment of society.

>but also wanting universities to take as much from that system as possible to the detriment of society.

I don't think anybody is saying universities should take as much as possible, only that it is to be expected. Because it is expected the government should not be enabling it. People have been asking the government to stop with these loans since the beginning saying this exact thing would happen.

They are not acting like capitalists because they don't have to. They offer a low value product for a high price, and the government foots the bill through guaranteed student loans. If they had to take risk on the loans, then they would act like capitalists, which means limiting expenses, and pricing the product where it provides economic value to the customers. If not, they cease to exist, like any other capitalist.

Schools take free government money to produce the right kind of voters. The wrong kind of voters get to pay for it. Win-win.