That and an incredible marketing push akin to how diamonds were marketed, as in you have to have a degree/diamond
The government subsidizing college educations causes the price of education to increase.
Whether you pay it back in 2 years or 20 years, the price is higher.
You also pay for it later, when you become a working taxpayer.
BTW government run healthcare is still an economic issue. The only difference is that there's one choice and it's compulsory.
In the Netherlands the government subsidizes universities per student they take on, provides a monthly stipend to students (from about $400 to $800 depending on whether your parents income, with the possibility to borrow more) and sets yearly home-student tuition-fees (at $2200). And still Dutch universities perform quite well in the world-rankings (all 14 roughly between spot 40 and 200).
Admittedly this is made easier by the fact that the Netherlands does not have any private universities (of any fame and influence), and the fact that things have been organized like this for a long time now...
After having spent 5 years in university, having a debt of even $40.000 is considered a lot here.
The simple solution is to stop subsidizing loans to any student for any degree.
People like to believe basic economic principles like supply and demand don't apply to things like education or healthcare, even when the evidence stares them in the face. (See millions of unemployable liberal arts graduates and the voracious demand for computer science majors.)
re student loan default data, this is very difficult to determine. First, many subsidized loans are being deferred, and thus not counted as "in default", even though they are not being repaid. The only data I can find quickly on the web only goes through 2009, which is obviously going to be dramatically lower than the default rate today.
Don't even get me started on the diamond thing. "Two monthly salaries". Good job De Beers (and Harvard/Yale/Vassar).
* extending loans directly instead of letting privatized banks make the money
* building new universities and work towards accredited alternatives (eg 10K BA)
* pushing people to existing universities via financial incentives
* establishing a max. tuition increase for private universities or risk losing any governmental funding (e.g. indirectly, no extend loans to people who attend private institutions)
* tax private uni endowments (often running in the hundreds of millions, or even billions, and mostly unused) to fund public education etc etc
This is not meant as a personal attack, but your claim that government doesn't play a role in American education is false. The U.S. government plays a massive role and is, arguably, the single biggest factor in the cost of American higher education. The federal government doles out many grants, but more importantly, it subsidizes student loans to cover tuition. This means just about anyone with a pulse can obtain a loan to cover tuition to whatever school they want to attend, regardless of what the student wants to study. Colleges large and small know this, and have dedicated staffs to help students obtain these loans.