This is not wrong (despite being common and the de facto explanation) but it isn't complete either. The reason I say this is because people that often say this (or read this) also conclude that the way to fix this is to just get rid of government backed loans. The issue is that this model doesn't question why the government backed loans in the first place. How they were seen as an investment in the people, as higher education was already prohibitively expensive. The solution failed because it did not account for a feedback loop, relying on competition to keep prices low rather than implicit coordination (sometimes explicit collusion). Mostly being due to momentum and prestige having an ineffable market value.

So we need to resolve that issue as well if we're to stop federally backed loans. There's more things at play as well and the convoluted mess is the real reason we haven't solved the problem. Realistically, this is probably true about most of the larger issues we face. I'm concerned that over simplifying the problem statement results in an over simplification of the solution and it just causes us to argue (which can be supported by evidence) or take ineffective/theatrical action rather than actually resolving the problem (meeting the intended goals (plural)).

We can keep having this conversation over and over, but it has happened for well over a decade now and no real progress has been made. We gotta start looking at the actual complexity of the situation as first order modeling isn't good enough.